Feels like time to open this thread. Here's a humdinger from Stratfor:================================================

Geopolitical Diary: Countermoves to a Russian ResurgenceAugust 15, 2008Poland and the United States announced an agreement on Thursday to station elements of a U.S. ballistic missile defense (BMD) system permanently on Polish territory. As part of the deal, Poland will also be provided with Patriot air defense batteries and an as-yet-unspecified number of U.S. Army personnel.

The world is only beginning to feel the ripples from the Kremlin’s decision to decisively exercise military power in Georgia. Moscow has now demonstrated that it is just as willing to use military tools as it is to use economic tools (it is the world’s single largest energy producer) and political tools. In short, Russia is back as an active player on the regional stage. And, as the Polish BMD deal indicates, other states have opinions on how to deal with that. Around the world, other states are considering their options.

Most of the countries of Central Europe — and especially the strategically vulnerable Baltic states — want the same thing that Poland seems to be getting: an explicit deployment of U.S. ground forces on their turf. The idea being that Russia will think long and hard about doing something to them if U.S. forces are not only precommitted to their defense as NATO allies but already physically on station in their territory. We expect many more such deals to be worked out in the weeks and months to come as the United States and NATO essentially shift their Cold War-era deployments several hundred miles to the east.

In Western Europe, the concern is of a slightly different type. While many share the Central Europeans’ concern about Russian military power, none are any longer frontline states. Their concern is more economic. Many European states — most notably, Germany — rely on Russian natural gas exports to keep their economies going. While the Central Europeans are looking for American deployments, the Western Europeans are more likely to funnel their efforts into finding alternative sources of natural gas, or alternatives to natural gas itself. Those that have the technology will also simply try to use less natural gas.

In the Arab world, the players that matter are Saudi Arabia and the other Arab Gulf states. These players see Russia primarily as an economic competitor. They also have a pre-existing hammer with which to beat the Russians. Arab oil money was essential to the development of the anti-Soviet Afghan mujahideen in the 1980s and the second Chechen insurgency in 1999. All of these states have helped crack down on those movements’ ideological progeny — al Qaeda — since the 9/11 attacks. However, all retain the ability — and the money — to turn the tap back on should the United States be willing.

Iran and Turkey are more complicated. Neither of the states always sees eye to eye with the Americans, but neither particularly cares for a resurgent Russia.

Iran, Turkey and Russia border the Caucasus. And none wants to see one of the other two become ascendant. Russian domination would threaten Turkey’s energy supplies. Russia’s fondness for sparking separatist conflicts in its rivals would raise complications for heterogeneously populated Iran.

But, at the same time, Turkey and Iran (much less the United States) are not natural partners against Russia. The Caucasus has long been a bit of a free-for-all, with geopolitical alliances shifting irregularly. Just as Russia has political, economic and military tools to bring to bear along its entire periphery, both Iran and Turkey can do the same in the Caucasus. It is going to be a very messy region.

China has even more mixed feelings. It would dearly love to tap Central Asia’s energy resources, but is concerned about clashing with pre-existing Russian interests. China is not so much threatened by Russia as it is desperate to avoid adding any more challenges to its already burgeoning list. There is a logic to China attempting to extend its influence north and west, but only if Russia is otherwise occupied. In essence, China wants to pretend that nothing has changed — unless Russia finds itself besieged by everyone else, at which point Beijing would love to take advantage.

All of these responses are potentially effective ones, but what they all have in common is that they cannot be applied overnight. It takes time to build a base and deploy troops to Poland. Shifting one’s economy away from natural gas requires substantial — and expensive — restructuring. Whipping up a Third Chechen War cannot be done in a weekend. Ankara and Tehran simply figuring out their options will take weeks. And China is loath to take the lead on anything regarding Russia right now.

Russia, in contrast, has gotten its energy exports — and income — to post-Cold War highs. Its military is gunning for a fight, and politically it is once again unified. The Kremlin does not require prep time to make its next moves.

The challenge for all of those seeking to contain a Russian resurgence is as simple to state as it is complex to initiate: to do so quickly enough and with enough partners that a Russia with two free hands cannot pre-empt.

GEORGIA CAN BE PUTIN'S AFGHANISTAN Written by Dr. Jack Wheeler Monday, 11 August 2008

Time to stop the hand-wringing about Russia's re-igniting the Cold War by invading Georgia. Time to start thinking of what a golden opportunity this presents.

First the reality. Russia, before, during, and after the Soviet Union was and remains a brutal imperialist dictatorship. The Soviet Union was simply the same old Czarist Russian imperialism with Marxism-Leninism as an ideological rationale. The fall of the USSR only meant the fall of the rationale.

So Russia is back to where it has always been, with the Russian compulsion for brute force bullying as its way of dealing with the world. It is no accident, comrades, that Russians were the Soviets, and it is no surprise whatever that they are behaving like Soviets in Georgia today.

Thus the fundamental reality of how to conduct foreign policy with Russia, however distasteful it may be to the squishes at the State Department chronically afflicted with terminal testicular atrophy:

The only thing Russians in the Kremlin understand and respect is superior force and the willingness to use it against them. If you don't give them a punch in the mouth and a bloody nose the moment they start to bully you, they will keep bullying you until you start fighting back hard - or you capitulate and obey their orders.

It's either-or, win-lose. Those are their rules. As Lenin expressed, Kto-kovo?, Who-whom? For Lenin, this was the only question that mattered, who conquers whom? Just as Lenin was the perfect Communist, so was he the perfect Russian.

Ronald Reagan won the Cold War by understanding that if those are the Russians' rules, then we had to play by them. Which is why he announced at his first cabinet meeting as president in January 1981: "Here's my strategy on the Cold War: We win, they lose."

The golden opportunity Putin is giving us by invading Georgia is that it gives us the perfect excuse to play by his rules. The way you play is this: identify Russian weaknesses and vulnerabilities, then exploit them to the hilt.

Putin, has, for example, some $40 billion (yes, with a ‘b') in personal hidden bank accounts in Switzerland and elsewhere in the name of various third-party cut-outs. Arrangements could be made to seize or attach them. Putin needs to be personally wiped out financially.

Russians are conducting a cyber-war upon Georgia. Pentagon hacker teams should be unleashed to conduct cyber-war upon Russian computer systems.

Every bit of intel and SIGINT (electronic or signal intelligence) we can get should be given to the Georgians.

But most important, the Georgians need Stinger anti-aircraft missiles and Javelin anti-tank missiles.

As explained by Col. Ralph Peters in The Phony, Brutal, Sloppy, and Inept Invasion of Georgia, the most striking feature of this war so far has been the incredibly incompetent performance of the Russian pilots. They've missed more targets than they've hit.

The Russians' mighty Red Army was defeated in Afghanistan by disorganized tribesmen armed with Stinger missiles. As the Afghans learned, take the Russians out of the air and they can be beaten on the ground. And the Afghans only had RPGs (rocket propelled grenade launchers) against Russian armor. They didn't have any Javelins.

The Georgians are better fighters, are far better trained and organized than the Afghan Mujahaddin. 2,000 Georgian soldiers have been fighting hard, battle-trained, in Iraq with Coalition forces - and are being flown back to Georgia.

Putin is serving himself up on a platter. Give the Georgians Stingers and Javelins, give them additional material and intel support, and they can make Georgia Putin's Afghanistan.

It is absolutely necessary for this to happen. Georgia is where Russian barbaric imperialism must be stopped. It can be stopped, but the action to do so must be now, before Russia's seizure of Georgia is consolidated. Then Ukraine is next.

I am calling upon every conservative leader to support freedom fighters in Georgia as they did in Afghanistan, Angola, and Nicaragua 25 years ago, and demand that President Bush provide that support as did President Reagan.

That's what defeated Soviet imperialism then, that's what can defeat Russian imperialism now. The Russian bear must be put back in its cage.

On Sept. 11, 1990, U.S. President George H. W. Bush addressed Congress. He spoke in the wake of the end of Communism in Eastern Europe, the weakening of the Soviet Union, and the invasion of Kuwait by Saddam Hussein. He argued that a New World Order was emerging: “A hundred generations have searched for this elusive path to peace, while a thousand wars raged across the span of human endeavor, and today that new world is struggling to be born. A world quite different from the one we’ve known. A world where the rule of law supplants the rule of the jungle. A world in which nations recognize the shared responsibility for freedom and justice. A world where the strong respect the rights of the weak.”

After every major, systemic war, there is the hope that this will be the war to end all wars. The idea driving it is simple. Wars are usually won by grand coalitions. The idea is that the coalition that won the war by working together will continue to work together to make the peace. Indeed, the idea is that the defeated will join the coalition and work with them to ensure the peace. This was the dream behind the Congress of Vienna, the League of Nations, the United Nations and, after the Cold War, NATO. The idea was that there would be no major issues that couldn’t be handled by the victors, now joined with the defeated. That was the idea that drove George H. W. Bush as the Cold War was coming to its end.

Those with the dream are always disappointed. The victorious coalition breaks apart. The defeated refuse to play the role assigned to them. New powers emerge that were not part of the coalition. Anyone may have ideals and visions. The reality of the world order is that there are profound divergences of interest in a world where distrust is a natural and reasonable response to reality. In the end, ideals and visions vanish in a new round of geopolitical conflict.

The post-Cold War world, the New World Order, ended with authority on Aug. 8, 2008, when Russia and Georgia went to war. Certainly, this war was not in itself of major significance, and a very good case can be made that the New World Order actually started coming apart on Sept. 11, 2001. But it was on Aug. 8 that a nation-state, Russia, attacked another nation-state, Georgia, out of fear of the intentions of a third nation-state, the United States. This causes us to begin thinking about the Real World Order.

The global system is suffering from two imbalances. First, one nation-state, the United States, remains overwhelmingly powerful, and no combination of powers are in a position to control its behavior. We are aware of all the economic problems besetting the United States, but the reality is that the American economy is larger than the next three economies combined (Japan, Germany and China). The U.S. military controls all the world’s oceans and effectively dominates space. Because of these factors, the United States remains politically powerful — not liked and perhaps not admired, but enormously powerful.

The second imbalance is within the United States itself. Its ground forces and the bulk of its logistical capability are committed to the Middle East, particularly Iraq and Afghanistan. The United States also is threatening on occasion to go to war with Iran, which would tie down most of its air power, and it is facing a destabilizing Pakistan. Therefore, there is this paradox: The United States is so powerful that, in the long run, it has created an imbalance in the global system. In the short run, however, it is so off balance that it has few, if any, military resources to deal with challenges elsewhere. That means that the United States remains the dominant power in the long run but it cannot exercise that power in the short run. This creates a window of opportunity for other countries to act.

The outcome of the Iraq war can be seen emerging. The United States has succeeded in creating the foundations for a political settlement among the main Iraqi factions that will create a relatively stable government. In that sense, U.S. policy has succeeded. But the problem the United States has is the length of time it took to achieve this success. Had it occurred in 2003, the United States would not suffer its current imbalance. But this is 2008, more than five years after the invasion. The United States never expected a war of this duration, nor did it plan for it. In order to fight the war, it had to inject a major portion of its ground fighting capability into it. The length of the war was the problem. U.S. ground forces are either in Iraq, recovering from a tour or preparing for a deployment. What strategic reserves are available are tasked into Afghanistan. Little is left over.

As Iraq pulled in the bulk of available forces, the United States did not shift its foreign policy elsewhere. For example, it remained committed to the expansion of democracy in the former Soviet Union and the expansion of NATO, to include Ukraine and Georgia. From the fall of the former Soviet Union, the United States saw itself as having a dominant role in reshaping post-Soviet social and political orders, including influencing the emergence of democratic institutions and free markets. The United States saw this almost in the same light as it saw the democratization of Germany and Japan after World War II. Having defeated the Soviet Union, it now fell to the United States to reshape the societies of the successor states.

Through the 1990s, the successor states, particularly Russia, were inert. Undergoing painful internal upheaval — which foreigners saw as reform but which many Russians viewed as a foreign-inspired national catastrophe — Russia could not resist American and European involvement in regional and internal affairs. From the American point of view, the reshaping of the region — from the Kosovo war to the expansion of NATO to the deployment of U.S. Air Force bases to Central Asia — was simply a logical expansion of the collapse of the Soviet Union. It was a benign attempt to stabilize the region, enhance its prosperity and security and integrate it into the global system.

As Russia regained its balance from the chaos of the 1990s, it began to see the American and European presence in a less benign light. It was not clear to the Russians that the United States was trying to stabilize the region. Rather, it appeared to the Russians that the United States was trying to take advantage of Russian weakness to impose a new politico-military reality in which Russia was to be surrounded with nations controlled by the United States and its military system, NATO. In spite of the promise made by Bill Clinton that NATO would not expand into the former Soviet Union, the three Baltic states were admitted. The promise was not addressed. NATO was expanded because it could and Russia could do nothing about it.

From the Russian point of view, the strategic break point was Ukraine. When the Orange Revolution came to Ukraine, the American and European impression was that this was a spontaneous democratic rising. The Russian perception was that it was a well-financed CIA operation to foment an anti-Russian and pro-American uprising in Ukraine. When the United States quickly began discussing the inclusion of Ukraine in NATO, the Russians came to the conclusion that the United States intended to surround and crush the Russian Federation. In their view, if NATO expanded into Ukraine, the Western military alliance would place Russia in a strategically untenable position. Russia would be indefensible. The American response was that it had no intention of threatening Russia. The Russian question was returned: Then why are you trying to take control of Ukraine? What other purpose would you have? The United States dismissed these Russian concerns as absurd. The Russians, not regarding them as absurd at all, began planning on the assumption of a hostile United States.

If the United States had intended to break the Russian Federation once and for all, the time for that was in the 1990s, before Yeltsin was replaced by Putin and before 9/11. There was, however, no clear policy on this, because the United States felt it had all the time in the world. Superficially this was true, but only superficially. First, the United States did not understand that the Yeltsin years were a temporary aberration and that a new government intending to stabilize Russia was inevitable. If not Putin, it would have been someone else. Second, the United States did not appreciate that it did not control the international agenda. Sept. 11, 2001, took away American options in the former Soviet Union. No only did it need Russian help in Afghanistan, but it was going to spend the next decade tied up in the Middle East. The United States had lost its room for maneuver and therefore had run out of time.

And now we come to the key point. In spite of diminishing military options outside of the Middle East, the United States did not modify its policy in the former Soviet Union. It continued to aggressively attempt to influence countries in the region, and it became particularly committed to integrating Ukraine and Georgia into NATO, in spite of the fact that both were of overwhelming strategic interest to the Russians. Ukraine dominated Russia’s southwestern flank, without any natural boundaries protecting them. Georgia was seen as a constant irritant in Chechnya as well as a barrier to Russian interests in the Caucasus.

Moving rapidly to consolidate U.S. control over these and other countries in the former Soviet Union made strategic sense. Russia was weak, divided and poorly governed. It could make no response. Continuing this policy in the 2000s, when the Russians were getting stronger, more united and better governed and while U.S. forces were no longer available, made much less sense. The United States continued to irritate the Russians without having, in the short run, the forces needed to act decisively.

The American calculation was that the Russian government would not confront American interests in the region. The Russian calculation was that it could not wait to confront these interests because the United States was concluding the Iraq war and would return to its pre-eminent position in a few short years. Therefore, it made no sense for Russia to wait and it made every sense for Russia to act as quickly as possible.

The Russians were partly influenced in their timing by the success of the American surge in Iraq. If the United States continued its policy and had force to back it up, the Russians would lose their window of opportunity. Moreover, the Russians had an additional lever for use on the Americans: Iran.

The United States had been playing a complex game with Iran for years, threatening to attack while trying to negotiate. The Americans needed the Russians. Sanctions against Iran would have no meaning if the Russians did not participate, and the United States did not want Russia selling advance air defense systems to Iran. (Such systems, which American analysts had warned were quite capable, were not present in Syria on Sept. 6, 2007, when the Israelis struck a nuclear facility there.) As the United States re-evaluates the Russian military, it does not want to be surprised by Russian technology. Therefore, the more aggressive the United States becomes toward Russia, the greater the difficulties it will have in Iran. This further encouraged the Russians to act sooner rather than later.

The Russians have now proven two things. First, contrary to the reality of the 1990s, they can execute a competent military operation. Second, contrary to regional perception, the United States cannot intervene. The Russian message was directed against Ukraine most of all, but the Baltics, Central Asia and Belarus are all listening. The Russians will not act precipitously. They expect all of these countries to adjust their foreign policies away from the United States and toward Russia. They are looking to see if the lesson is absorbed. At first, there will be mighty speeches and resistance. But the reality on the ground is the reality on the ground.

We would expect the Russians to get traction. But if they don’t, the Russians are aware that they are, in the long run, much weaker than the Americans, and that they will retain their regional position of strength only while the United States is off balance in Iraq. If the lesson isn’t absorbed, the Russians are capable of more direct action, and they will not let this chance slip away. This is their chance to redefine their sphere of influence. They will not get another.

The other country that is watching and thinking is Iran. Iran had accepted the idea that it had lost the chance to dominate Iraq. It had also accepted the idea that it would have to bargain away its nuclear capability or lose it. The Iranians are now wondering if this is still true and are undoubtedly pinging the Russians about the situation. Meanwhile, the Russians are waiting for the Americans to calm down and get serious. If the Americans plan to take meaningful action against them, they will respond in Iran. But the Americans have no meaningful actions they can take; they need to get out of Iraq and they need help against Iran. The quid pro quo here is obvious. The United States acquiesces to Russian actions (which it can’t do anything about), while the Russians cooperate with the United States against Iran getting nuclear weapons (something Russia does not want to see).

One of the interesting concepts of the New World Order was that all serious countries would want to participate in it and that the only threat would come from rogue states and nonstate actors such as North Korea and al Qaeda. Serious analysts argued that conflict between nation-states would not be important in the 21st century. There will certainly be rogue states and nonstate actors, but the 21st century will be no different than any other century. On Aug. 8, the Russians invited us all to the Real World Order.

In some Western nations an utterly one-sided picture has been painted of the recent crisis in the Georgia-South Ossetia conflict. The statements of American officials would lead one to conclude that the crisis began when Russia sent in its troops to support its peacekeepers there.

Meticulously avoided in those statements: The decision of Tbilisi to use crude military force against South Ossetia in the early hours of Aug. 8. The Georgian army used multiple rocket launchers, artillery and air force to attack the sleeping city of Tskhinvali.

Some honest independent observers acknowledge that a surprised Russia didn't respond immediately. We started moving our troops in support of peacekeepers only on the second day of Georgia's ruthless military assault. Yes, our military struck sites outside of South Ossetia. When the positions of your peacekeepers and the civilian population they have been mandated to protect are shelled, the sources of such attacks are legitimate targets.

Our military acted efficiently and professionally. It was an able ground operation that quickly achieved its very clear and legitimate objectives. It was very different, for example, from the U.S./NATO operation against Serbia over Kosovo in 1999, when an air bombardment campaign ran out of military targets and degenerated into attacks on bridges, TV towers, passenger trains and other civilian sites, even hitting an embassy.

In this instance, Russia used force in full conformity with international law, its right of self-defense, and its obligations under the agreements with regard to this particular conflict. Russia could not allow its peacekeepers to watch acts of genocide committed in front of their eyes, as happened in the Bosnian city of Srebrenica in 1995.

But what of the U.S.'s role leading up to this conflict? U.S. involvement with the Tbilisi regime—past and future—must be addressed to fully understand the conflict. When the mantra of the "Georgian democratic government" is repeated time and time again, does it mean that by U.S. standards, a democratic government is allowed to act in brutal fashion against a civilian population it claims to be its own, simply because it is "democratic"?

Another real issue is U.S. military involvement with the government of Georgian President Mikheil Saakashvili. Did Washington purposely encourage an irresponsible and unpredictable regime in this misadventure? If the U.S. couldn't control Tbilisi's behavior before, why do some in the U.S. seek to rush to rearm the Georgian military now?

Russia, by contrast, remains committed to a peaceful resolution in the Caucasus.

We'll continue to seek to deprive the present Georgian regime of the potential and resources to do more mischief. An embargo on arms supplies to the current Tbilisi regime would be a start.

We will make sure that the Medvedev-Sarkozy plan endorsed in Moscow on Aug. 12 is implemented, provided the parties to the conflict cooperate in good faith. So far we are not sure at all that Tbilisi is ready. President Saakashvili keeps trying to persuade the world that the South Ossetian capital of Tskhinvali was destroyed not by the Georgian attack but by the Russian forces who, according to Mr. Saakashvili, bombed the city after they entered it.

Russia is committed to the ongoing positive development of relations with the U.S. That kind of agenda is set forth in the Foreign Policy Concept—the framework document that sets out the basic directions of Russia's foreign policy—recently approved by President Dmitry Medvedev.

However, it must be remembered that, as between any other major world powers, our bilateral relationship can only advance upon the basis of reciprocity. And that is exactly what has been missing over the past 16 years. I meant precisely that when I said that the U.S. will have to choose between its virtual Georgia project and its much broader partnership with Russia.

The signs are ominous. Several joint military exercises have been cancelled by the Americans. Now Washington suggests our Navy ships are no longer welcome to take part in the Active Endeavour counterterrorism and counterproliferation operation in the Mediterranean. Washington also threatens to freeze our bilateral strategic stability dialogue.

Of course, that strategic dialogue has not led us too far since last fall, including on the issue of U.S. missile defense sites in Eastern Europe and the future of the strategic arms reduction regime. But the threat itself to drop these issues from our bilateral agenda is very indicative of the cost of the choice being made in Washington in favor of the discredited regime in Tbilisi. The U.S. seems to be eager to punish Russia to save the face of a failed "democratic" leader at the expense of solving the problems that are much more important to the entire world.

It is up to the American side to decide whether it wants a relationship with Russia that our two peoples deserve. The geopolitical reality we'll have to deal with at the end of the day will inevitably force us to cooperate.

To begin down the road of cooperation, it would not be a bad idea to do a very simple thing: Just admit for a moment that the course of history must not depend entirely on what the Georgian president is saying. Just admit that a democratically elected leader can lie. Just admit that you have other sources of information—and other objectives—that shape your foreign policy.

Geopolitical Diary: The Georgian-Russian Conflict and a Return to IranAugust 20, 2008 | 0139 GMTMeanwhile, back at the ranch, the Iranians waited, starving for attention. When last we visited them, the Iranians had met with the United States and the rest of the permanent members of the Security Council, including Russia, had concluded a meeting at which the Iranians were supposed to deliver their answer to demands that they freeze their uranium enrichment program. The United States had given Iran two weeks to provide a clear and satisfactory answer. After the meeting, the United States announced that the Iranians had failed to deliver and therefore new sanctions would be imposed, per prior agreement with the members of the negotiating group.

Just before this, of course, the United States and Israel had very publicly increased the pressure on Iran, carefully orchestrating a sense of impending attack. The Israelis had staged a mock attack on Greece to demonstrate their military capabilities and the United States had carefully released information about the secret exercise’s existence. Reports circulated of Israeli aircraft operating at U.S. air bases in Iraq. The Internet was awash with rumors of a massive U.S. fleet on its way to the Persian Gulf to blockade Iranian ports. Let us pause here for a moment and address all those who wrote in to us asking why we didn’t mention this fleet. For the record, we didn’t write about it because there is no fleet. It was just one of those things that make the blogosphere an exciting place to visit.

Moving forward. At the time, we regarded these threats by the United States as bluffs, but the possibility of sanctions against Iran as very real. And then Georgia intervened. Now, bluffing the Russians on Georgia took precedence over bluffing the Iranians and the U.S. administration went quiet on Iran. Moreover, the very real possibility of additional sanctions has become less real, since the Russians were a key element to those sanctions. If the Russians don’t participate, the Iranians will have to buy European goods through the Russians, an inconvenience with a mark-up but hardly a threat to their national security.

Therefore, as we return to the Iranian crisis, it becomes important to consider what the Russians are going to do and the questions that arise therefrom. First, given the response from NATO on Tuesday that it is still prepared to give NATO membership to Georgia in the future, we ask — are the Russians prepared to participate in the Iranian sanctions regime called for by the United States? Second, and far more important, what is the red line for the Russians? To be more precise, at what point in the American response on NATO do the Russians decide to counter by increasing arms shipments to the Iranians, including the advanced S-300 air defense system, as well as resume supplying nuclear technology for Tehran’s civilian reactor? The United States is at the point where it needs to decide which issue takes priority, Georgia or Iran. We do not see an easy way for the United States to press the Russians on Georgia while also expecting Russian cooperation on Iran.

The Iranians also have important decisions to make. In our view, the Iranians had basically made the decision, in part because they felt isolated from all great powers, to accept the neutralist solution in Iraq and negotiate some settlement on the nuclear program. Now the Iranians must be thoughtfully considering the Russian position toward them and watching to see how far U.S.-Russian relations deteriorate and whether they can recruit an ally. If they can, then all bets on Iraqi stability could be off. Meanwhile, Iraqi Shiite leader Muqtada al-Sadr re-emerged from the shadows Tuesday threatening to help drive the Americans from Iraq. That is usually a sign that Iran is testing the water.

Our guess is that the Americans will deal with the problem at hand, which is Iraq and Iran, Afghanistan and Pakistan. That will mean that after a period of delivering strong messages to the Russians, the United States will back off from doing anything that will cause the Russians to retaliate in Iran. In turn, we will soon see warnings made to Russia replaced by warnings made to Iran, and Russia, having started to reshape its sphere of influence, will resume its cooperation with the United States. Thus, we would expect to see Iran on the front pages again shortly.

If this doesn’t happen, if the administration keeps pounding the Russians and leaves the Iranians back at the ranch, then a very quick and strategic re-evaluation has taken place and we are in a different place indeed. Thus, we will likely see the next phase of this evolution unfold on the front page of the New York Times and Washington Post when the administration leaks new, highly secret plans to attack Iran.

In the wake of Russia's invasion of Georgia, the United States and its trans-Atlantic allies have rightly focused on two urgent and immediate tasks: getting Russian soldiers out, and humanitarian aid in.

But having just returned from Georgia, Ukraine and Poland, where we met with leaders of these countries, we believe it is imperative for the West to look beyond the day-to-day management of this crisis. The longer-term strategic consequences, some of which are already being felt far beyond the Caucasus, have to be addressed.

Russia's aggression is not just a threat to a tiny democracy on the edge of Europe. It is a challenge to the political order and values at the heart of the continent.

Corbis Slobodan Milosevic exploited ethnic grievances. For more than 60 years, from World War II through the Cold War to our intervention in the former Yugoslavia in the 1990s, the U.S. has fostered and fought for the creation of a Europe that is whole, free and at peace. This stands as one of the greatest strategic achievements of the 20th century: the gradual transformation of a continent, once the scene of the most violent and destructive wars ever waged, into an oasis of peace and prosperity where borders are open and uncontested and aggression unthinkable.

Russia's invasion of Georgia represents the most serious challenge to this political order since Slobodan Milosevic unleashed the demons of ethnic nationalism in the Balkans. What is happening in Georgia today, therefore, is not simply a territorial dispute. It is a struggle about whether a new dividing line is drawn across Europe: between nations that are free to determine their own destinies, and nations that are consigned to the Kremlin's autocratic orbit.

That is the reason countries like Poland, Ukraine and the Baltic States are watching what happens in the Caucasus so closely. We heard that last week in Warsaw, Kiev and Tbilisi. There is no doubt in the minds of leaders in Ukraine and Poland -- if Moscow succeeds in Georgia, they may be next.

There is disturbing evidence Russia is already laying the groundwork to apply the same arguments used to justify its intervention in Georgia to other parts of its near abroad -- most ominously in Crimea. This strategically important peninsula is part of Ukraine, but with a large ethnic Russian population and the headquarters of Russia's Black Sea Fleet at Sevastopol.

The first priority of America and Europe must be to prevent the Kremlin from achieving its strategic objectives in Georgia. Having been deterred from marching on Tbilisi and militarily overthrowing the democratically elected government there, Russian forces spent last week destroying the country's infrastructure, including roads, bridges, port and security facilities. This was more than random looting. It was a deliberate campaign to collapse the economy of Georgia, in the hope of taking the government down with it.

The humanitarian supplies the U.S. military is now ferrying to Georgia are critically important to the innocent men, women and children displaced by the fighting, some of whom we saw last week. Also needed, immediately, is a joint commitment by the U.S. and the European Union to fund a large-scale, comprehensive reconstruction plan -- developed by the Georgian government, in consultation with the World Bank, IMF and other international authorities -- and for the U.S. Congress to support this plan as soon as it returns to session in September.

Any assistance plan must also include the rebuilding of Georgia's security forces. Our past aid to the Georgian military focused on supporting the light, counterterrorism-oriented forces that facilitate Tbilisi's contribution to coalition operations in Iraq. We avoided giving the types of security aid that could have been used to blunt Russia's conventional onslaught. It is time for that to change.

Specifically, the Georgian military should be given the antiaircraft and antiarmor systems necessary to deter any renewed Russian aggression. These defensive capabilities will help to prevent this conflict from erupting again, and make clear we will not allow the Russians to forcibly redraw the boundaries of sovereign nations.

Our response to the invasion of Georgia must include regional actions to reassure Russia's rattled neighbors and strengthen trans-Atlantic solidarity. This means reinvigorating NATO as a military alliance, not just a political one. Contingency planning for the defense of all member states against conventional and unconventional attack, including cyber warfare, needs to be revived. The credibility of Article Five of the NATO Charter -- that an attack against one really can and will be treated as an attack against all -- needs to be bolstered.

The U.S. must also reaffirm its commitment to allies that have been the targets of Russian bullying because of their willingness to work with Washington. The recent missile-defense agreement between Poland and the U.S., for instance, is not aimed at Russia. But this has not stopped senior Russian officials from speaking openly about military retaliation against Warsaw. Irrespective of our political differences over missile defense, Democrats and Republicans should join together in Congress to pledge solidarity with Poland, along with the Czech Republic, against these outrageous Russian threats.

Finally, the U.S. and Europe need a new trans-Atlantic energy alliance. In recent years, Russia has proven all too willing to use its oil and gas resources as a weapon, and to try to consolidate control over the strategic energy corridors to the West. By working together, an alliance can frustrate these designs and diminish our dependence on the foreign oil that is responsible for the higher energy prices here at home.

In crafting a response to the Georgia crisis, we must above all reaffirm our conviction that Russia need not be a competitor or an adversary. Since the collapse of the Soviet Union, Democratic and Republican administrations have engaged Russia, sending billions of dollars to speed its economic recovery and welcoming its integration into the flagship institutions of the international community. We did this because we believed that a strong, prosperous Russia can be a strategic partner and a friend. We still do.

But Russia's leaders have made a different choice. While we stand ready to rebuild relations with Moscow and work together on shared challenges, Russia's current course will only alienate and isolate it from the rest of the world.

We believe history will judge the Russian invasion of Georgia as a serious strategic miscalculation. Although it is for the moment flush with oil wealth, Russia's political elite remains kleptocratic, and its aggression exposed as much weakness as strength. The invasion of Georgia will not only have a unifying effect on the West, it also made clear that Russia -- unlike the Soviet Union -- has few real allies of strategic worth. To date, the only countries to defend Russia's actions in the Caucasus have been Cuba and Belarus -- and the latter, only after the Kremlin publicly complained about its silence.

In the long run, a Russia that tries to define its greatness in terms of spheres of influence, client states and forced fealty to Moscow will fail -- impoverishing its citizens in the process. The question is only how long until Russia's leaders rediscover this lesson from their own history.

Until they do, the watchword of the West must be solidarity: solidarity with the people of Georgia and its democratically elected government, solidarity with our allies throughout the region, and above all, solidarity with the values that have given meaning to our trans-Atlantic community of democracies and our vision of a European continent that is whole, free and at peace.

Mr. Graham is a Republican senator from South Carolina. Mr. Lieberman is an Independent Democratic senator from Connecticut.

Russia Is Dangerous But WeakAugust 26, 2008; Page A19'In Russia," wrote the great scholar of Russian imperialism Dietrich Geyer many years ago, "expansion was an expression of economic weakness, not exuberant strength."

Keep this observation in mind as Vladimir Putin and his minions bask in the glow of Western magazine cover stories about Russia's "resurgence" following its splendid little war against plucky little Georgia. The Kremlin is certainly confident these days, buoyed by years of rising commodity prices and a bullying foreign policy that mistakes fear for respect -- the very combination that made the Soviet Union seem invincible in the 1970s.

But the Soviet Union wasn't invincible. And here's a crazy thought: The same laws of social, economic and geopolitical gravity that applied in Brezhnev's U.S.S.R. apply equally in Mr. Putin's KGB state.

Take something as basic as demography. "In the next four decades," noted CIA Director Michael Hayden earlier this year, "we expect . . . the population of Russia to shrink by 32 million people [to about 110 million]. That means Russia will lose about a quarter of its population. To sustain its economy, Russia increasingly will have to look elsewhere for workers. Some of them will be immigrant Russians coming from the former Soviet states, what the Russians call the near abroad. But there aren't enough of them to make up that population loss. Others will be Chinese and non-Russians from the Caucasus, Central Asia and elsewhere, potentially aggravating Russia's already uneasy racial and religious tensions."

Or take oil and gas production, which accounts for one-third of the country's budget, 64% of its export revenue, 30% of foreign direct investment, and a little more than 20% of gross domestic product.

There's bad news here, too. Oil production is set to decline this year for the first time in a decade, a decline that is widely expected to accelerate rapidly in 2010. Of Russia's 14 largest oil fields, seven are more than 50% depleted. Production at its four largest gas fields is also in decline. Russia drilled about four million feet of new wells last year. In 1990, it drilled 17 million.

None of this is because Russia is necessarily running out of oil and gas: Existing fields could be better managed, and huge expanses of territory remain unexplored. Instead, it is a function of underinvestment, incompetence, corruption, political interference and crude profiteering. "If you're running Gazprom but you don't really own it, then your interest is in maximizing short-term profits, not long-term development," a Western diplomat told McClatchy's Tom Lasseter.

Amazingly, the system is of deliberate design, as if nothing was learned from the collapse of communism. Parastatal companies are rarely if ever efficient. Yet Mr. Putin has gone about effectively nationalizing entire industries. Foreign investors crave predictability. Yet Mr. Putin has created conditions which his own president, Dmitry Medvedev, calls "legal nihilism." Foreign customers of Russia's commodities seek reliable supplies. Yet Mr. Putin has made no secret of his willingness to turn the energy spigot off whenever it suits his political convenience.

With the exception of Robert Mugabe, no other leader has so completely fouled his own nest as Mr. Putin, or squandered so much international good will. In 2003, Mr. Putin formed, with Germany and France, a coalition of the unwilling to oppose the invasion of Iraq. It was a coalition he might have built on to consolidate Russia's place in, and perhaps eventually atop, Europe. Even Condoleezza Rice seemed prepared to go along, with her reported inane comment that the U.S. should "forgive" Russia while "ignoring" Germany and "punishing" France.

Instead, we have the spectacles of Russia's nasty meddling in Ukraine's 2004 disputed presidential election, the murder in Britain of ex-KGB man Alexander Litvinenko in 2006, and to cap it off this month's Georgia venture.

Now the Poles have agreed to U.S. missile defense, John McCain's call to expel Russia from the G-8 suddenly seems credible, and even European leftists are looking askance at the man they once cheered for his Iraq stance. No doubt Mr. Putin despises these people -- and can afford to, as long as Europe remains overwhelmingly reliant on Russian energy and energy prices remain high.

But those prices are bound to fall, as they always have. What will Russia be left with then? And what will it mean for Mr. Putin's clique, where the possibility of infighting has only grown with the split between his ex-KGB siloviki pals who wanted the presidency and the members of Mr. Medvedev's camp who got it?

For much of its history, Russia has been a weak state masquerading as a strong one -- a psychological profile in insecurity. That's why it has generally sought its advantage internationally by acting as an opportunistic spoiler, as it now does over Iran, rather than as a constructive partner seeking to magnify its influence (à la Britain) or as a rising power patiently asserting its place (à la China).

How does one deal with a neurotic? Not by coddling him. Russia is dangerous but it's also weak, and it would be good to find ways to remind it of that latter fact. Stinger missiles for Georgia would be a start.

Russia began the week with a blunt message to the West: You may need us, but wedon't need you.

First, Russian President Dmitri Medvedev told the Russian press that NATO isn'tsincere in its desire to cooperate with Russia, and therefore Russia is prepared tocompletely break ties with the Western military alliance. According to Medvedev,even if NATO chooses to cut ties with Russia, "nothing terrible will happen" toMoscow.

Second, Russian Prime Minister Vladimir Putin announced that World TradeOrganization membership no longer interests Moscow. He added that Russia would soonbe pulling out of several WTO-related agreements, thereby paving the way for Russiato formally withdraw its membership bid after more than a decade of negotiations.

Third, the Russian Duma and Federal Council unanimously approved a nonbindingresolution calling for the recognition of the Georgian breakaway regions of SouthOssetia and Abkhazia. Though this is largely a symbolic gesture for now, theRussians are making clear that they can turn the Kosovo precedent on the West in asnap.

In yet another blow to the West, Azerbaijan shipped approximately 200,000 barrels ofcrude to Iran on Monday. This is no ordinary economic transaction; Azerbaijan is theorigin of the Baku-Tbilisi-Ceyhan pipeline that circumvents Russia and transportsCaspian oil to the West. A recent pipeline explosion combined with Russian militaryaction in Georgia effectively have knocked the pipeline offline, leaving Baku withno choice but to look south and sell to Iran to maintain some level of oil income.This energy deal runs completely counter to U.S. strategy to keep Iran in afinancial stranglehold. Through both direct and indirect means, Russia hassimultaneously thrown a monkey wrench into the West's plans to evade Russian energybullying tactics while undermining Washington's pressure policies against Iran.

The Russians are getting increasingly bolder in their actions against the West,taking full advantage of the fact that NATO can do little to seriously undermineRussia's moves in the Caucasus. But Russia is not invincible -- especially when itcomes to Russian defenses against the West in the Black Sea.

The Black Sea is absolutely critical to Russian defense. Though NATO does notcurrently have the capability to project power through land forces against Russia,it does have the naval assets to give the Russians pause. Already, nine Westernwarships (including U.S., Polish, Spanish, Turkish, and token Bulgarian and Romanianvessels) have made their way into the Black Sea in the name of humanitarian aid forGeorgia. Russia is accusing the West of building up a NATO strike group in this bodyof water with which to threaten Russia's hold on the Caucasus, and perhaps beyond.

The Russians simply cannot allow an increased NATO presence in this particular bodyof water to remain unanswered. The Black Sea is an important buffer for what is adirect line to the Russian underbelly, the Ukrainian plains and the land bridge thatextends between the Black and Caspian Seas. Russia is well-aware of its weaknesseswhen it comes to defending this crucial frontier. The Black Sea, and the Aegeanbeyond it, essentially comprises a NATO lake. Controlled by Turkey through theDardanelles, the Turkish and U.S. naval presence combined could easily overwhelm theRussian Black Sea Fleet. The last thing Moscow wants is a U.S. naval strike force inthe Black Sea threatening Moscow's control of the Caucasus, crucial for itslogistical and supply links to Russian troops in Georgia.

And so, the Russian response is already beginning to take effect. The Black Sea Navyflagship "Moskva" sailed from Sevastopol today, and the Russians are likely todeploy more of their current -- albeit limited -- naval assets out of the CrimeanPeninsula. Such moves are only likely to give NATO forces more cause to beef uptheir naval presence in the Black Sea, further contributing to the Kremlin's senseof insecurity.

At that point, the next logical step for the Russians is to start spending some oftheir three quarters of a trillion dollars in reserves on covert operations thatwould force the United States to split its attention. It was not too long ago thatthe Russian intelligence powerhouse excelled in starting up fires in Latin America,Africa, Europe and the Middle East to keep the West preoccupied. In the Cold Wardays, the Russian FSB and KGB were neck-deep in backing groups like the Sandinistasin Nicaragua, the Red Brigades in Italy and the Palestine Liberation Organizationacross the Middle East. Names and ideologies have since shifted, but it is notbeyond the Russian FSB to spread its tentacles once again into certain areas of theworld where it can poke and prod the West.

This type of tit-for-tat escalation defined the Cold War. Now that the Black Sea hascome into play, we are now just a few short steps from having this fracas in theCaucasus fully revive those Cold War tensions. Russia may have been looking for arelatively risk-free option to confront the United States with the war in Georgia.But now that we are seeing hints of a NATO naval build-up in the Black Sea, theRussians may be getting more than they asked for.

The Medvedev Doctrine and American StrategySeptember 2, 2008StratforBy George Friedman

The United States has been fighting a war in the Islamic world since 2001. Its main theaters of operation are in Afghanistan and Iraq, but its politico-military focus spreads throughout the Islamic world, from Mindanao to Morocco. The situation on Aug. 7, 2008, was as follows:

The war in Iraq was moving toward an acceptable but not optimal solution. The government in Baghdad was not pro-American, but neither was it an Iranian puppet, and that was the best that could be hoped for. The United States anticipated pulling out troops, but not in a disorderly fashion. The war in Afghanistan was deteriorating for the United States and NATO forces. The Taliban was increasingly effective, and large areas of the country were falling to its control. Force in Afghanistan was insufficient, and any troops withdrawn from Iraq would have to be deployed to Afghanistan to stabilize the situation. Political conditions in neighboring Pakistan were deteriorating, and that deterioration inevitably affected Afghanistan. The United States had been locked in a confrontation with Iran over its nuclear program, demanding that Tehran halt enrichment of uranium or face U.S. action. The United States had assembled a group of six countries (the permanent members of the U.N. Security Council plus Germany) that agreed with the U.S. goal, was engaged in negotiations with Iran, and had agreed at some point to impose sanctions on Iran if Tehran failed to comply. The United States was also leaking stories about impending air attacks on Iran by Israel or the United States if Tehran didn’t abandon its enrichment program. The United States had the implicit agreement of the group of six not to sell arms to Tehran, creating a real sense of isolation in Iran. Related Special Topic PageThe Russian Resurgence In short, the United States remained heavily committed to a region stretching from Iraq to Pakistan, with main force committed to Iraq and Afghanistan, and the possibility of commitments to Pakistan (and above all to Iran) on the table. U.S. ground forces were stretched to the limit, and U.S. airpower, naval and land-based forces had to stand by for the possibility of an air campaign in Iran — regardless of whether the U.S. planned an attack, since the credibility of a bluff depended on the availability of force.

The situation in this region actually was improving, but the United States had to remain committed there. It was therefore no accident that the Russians invaded Georgia on Aug. 8 following a Georgian attack on South Ossetia. Forgetting the details of who did what to whom, the United States had created a massive window of opportunity for the Russians: For the foreseeable future, the United States had no significant forces to spare to deploy elsewhere in the world, nor the ability to sustain them in extended combat. Moreover, the United States was relying on Russian cooperation both against Iran and potentially in Afghanistan, where Moscow’s influence with some factions remains substantial. The United States needed the Russians and couldn’t block the Russians. Therefore, the Russians inevitably chose this moment to strike.

On Sunday, Russian Prime Minister Dmitri Medvedev in effect ran up the Jolly Roger. Whatever the United States thought it was dealing with in Russia, Medvedev made the Russian position very clear. He stated Russian foreign policy in five succinct points, which we can think of as the Medvedev Doctrine (and which we see fit to quote here):

First, Russia recognizes the primacy of the fundamental principles of international law, which define the relations between civilized peoples. We will build our relations with other countries within the framework of these principles and this concept of international law. Second, the world should be multipolar. A single-pole world is unacceptable. Domination is something we cannot allow. We cannot accept a world order in which one country makes all the decisions, even as serious and influential a country as the United States of America. Such a world is unstable and threatened by conflict. Third, Russia does not want confrontation with any other country. Russia has no intention of isolating itself. We will develop friendly relations with Europe, the United States, and other countries, as much as is possible. Fourth, protecting the lives and dignity of our citizens, wherever they may be, is an unquestionable priority for our country. Our foreign policy decisions will be based on this need. We will also protect the interests of our business community abroad. It should be clear to all that we will respond to any aggressive acts committed against us. Finally, fifth, as is the case of other countries, there are regions in which Russia has privileged interests. These regions are home to countries with which we share special historical relations and are bound together as friends and good neighbors. We will pay particular attention to our work in these regions and build friendly ties with these countries, our close neighbors. Medvedev concluded, “These are the principles I will follow in carrying out our foreign policy. As for the future, it depends not only on us but also on our friends and partners in the international community. They have a choice.”

The second point in this doctrine states that Russia does not accept the primacy of the United States in the international system. According to the third point, while Russia wants good relations with the United States and Europe, this depends on their behavior toward Russia and not just on Russia’s behavior. The fourth point states that Russia will protect the interests of Russians wherever they are — even if they live in the Baltic states or in Georgia, for example. This provides a doctrinal basis for intervention in such countries if Russia finds it necessary.

The fifth point is the critical one: “As is the case of other countries, there are regions in which Russia has privileged interests.” In other words, the Russians have special interests in the former Soviet Union and in friendly relations with these states. Intrusions by others into these regions that undermine pro-Russian regimes will be regarded as a threat to Russia’s “special interests.”

Thus, the Georgian conflict was not an isolated event — rather, Medvedev is saying that Russia is engaged in a general redefinition of the regional and global system. Locally, it would not be correct to say that Russia is trying to resurrect the Soviet Union or the Russian empire. It would be correct to say that Russia is creating a new structure of relations in the geography of its predecessors, with a new institutional structure with Moscow at its center. Globally, the Russians want to use this new regional power — and substantial Russian nuclear assets — to be part of a global system in which the United States loses its primacy.

These are ambitious goals, to say the least. But the Russians believe that the United States is off balance in the Islamic world and that there is an opportunity here, if they move quickly, to create a new reality before the United States is ready to respond. Europe has neither the military weight nor the will to actively resist Russia. Moreover, the Europeans are heavily dependent on Russian natural gas supplies over the coming years, and Russia can survive without selling it to them far better than the Europeans can survive without buying it. The Europeans are not a substantial factor in the equation, nor are they likely to become substantial.

This leaves the United States in an extremely difficult strategic position. The United States opposed the Soviet Union after 1945 not only for ideological reasons but also for geopolitical ones. If the Soviet Union had broken out of its encirclement and dominated all of Europe, the total economic power at its disposal, coupled with its population, would have allowed the Soviets to construct a navy that could challenge U.S. maritime hegemony and put the continental United States in jeopardy. It was U.S. policy during World Wars I and II and the Cold War to act militarily to prevent any power from dominating the Eurasian landmass. For the United States, this was the most important task throughout the 20th century.

The U.S.-jihadist war was waged in a strategic framework that assumed that the question of hegemony over Eurasia was closed. Germany’s defeat in World War II and the Soviet Union’s defeat in the Cold War meant that there was no claimant to Eurasia, and the United States was free to focus on what appeared to be the current priority — the defeat of radical Islamism. It appeared that the main threat to this strategy was the patience of the American public, not an attempt to resurrect a major Eurasian power.

The United States now faces a massive strategic dilemma, and it has limited military options against the Russians. It could choose a naval option, in which it would block the four Russian maritime outlets, the Sea of Japan and the Black, Baltic and Barents seas. The United States has ample military force with which to do this and could potentially do so without allied cooperation, which it would lack. It is extremely unlikely that the NATO council would unanimously support a blockade of Russia, which would be an act of war.

But while a blockade like this would certainly hurt the Russians, Russia is ultimately a land power. It is also capable of shipping and importing through third parties, meaning it could potentially acquire and ship key goods through European or Turkish ports (or Iranian ports, for that matter). The blockade option is thus more attractive on first glance than on deeper analysis.

More important, any overt U.S. action against Russia would result in counteractions. During the Cold War, the Soviets attacked American global interest not by sending Soviet troops, but by supporting regimes and factions with weapons and economic aid. Vietnam was the classic example: The Russians tied down 500,000 U.S. troops without placing major Russian forces at risk. Throughout the world, the Soviets implemented programs of subversion and aid to friendly regimes, forcing the United States either to accept pro-Soviet regimes, as with Cuba, or fight them at disproportionate cost.

In the present situation, the Russian response would strike at the heart of American strategy in the Islamic world. In the long run, the Russians have little interest in strengthening the Islamic world — but for the moment, they have substantial interest in maintaining American imbalance and sapping U.S. forces. The Russians have a long history of supporting Middle Eastern regimes with weapons shipments, and it is no accident that the first world leader they met with after invading Georgia was Syrian President Bashar al Assad. This was a clear signal that if the U.S. responded aggressively to Russia’s actions in Georgia, Moscow would ship a range of weapons to Syria — and far worse, to Iran. Indeed, Russia could conceivably send weapons to factions in Iraq that do not support the current regime, as well as to groups like Hezbollah. Moscow also could encourage the Iranians to withdraw their support for the Iraqi government and plunge Iraq back into conflict. Finally, Russia could ship weapons to the Taliban and work to further destabilize Pakistan.

At the moment, the United States faces the strategic problem that the Russians have options while the United States does not. Not only does the U.S. commitment of ground forces in the Islamic world leave the United States without strategic reserve, but the political arrangements under which these troops operate make them highly vulnerable to Russian manipulation — with few satisfactory U.S. counters.

The U.S. government is trying to think through how it can maintain its commitment in the Islamic world and resist the Russian reassertion of hegemony in the former Soviet Union. If the United States could very rapidly win its wars in the region, this would be possible. But the Russians are in a position to prolong these wars, and even without such agitation, the American ability to close off the conflicts is severely limited. The United States could massively increase the size of its army and make deployments into the Baltics, Ukraine and Central Asia to thwart Russian plans, but it would take years to build up these forces and the active cooperation of Europe to deploy them. Logistically, European support would be essential — but the Europeans in general, and the Germans in particular, have no appetite for this war. Expanding the U.S. Army is necessary, but it does not affect the current strategic reality.

This logistical issue might be manageable, but the real heart of this problem is not merely the deployment of U.S. forces in the Islamic world — it is the Russians’ ability to use weapons sales and covert means to deteriorate conditions dramatically. With active Russian hostility added to the current reality, the strategic situation in the Islamic world could rapidly spin out of control.

The United States is therefore trapped by its commitment to the Islamic world. It does not have sufficient forces to block Russian hegemony in the former Soviet Union, and if it tries to block the Russians with naval or air forces, it faces a dangerous riposte from the Russians in the Islamic world. If it does nothing, it creates a strategic threat that potentially towers over the threat in the Islamic world.

The United States now has to make a fundamental strategic decision. If it remains committed to its current strategy, it cannot respond to the Russians. If it does not respond to the Russians for five or 10 years, the world will look very much like it did from 1945 to 1992. There will be another Cold War at the very least, with a peer power much poorer than the United States but prepared to devote huge amounts of money to national defense.

There are four broad U.S. options:

Attempt to make a settlement with Iran that would guarantee the neutral stability of Iraq and permit the rapid withdrawal of U.S. forces there. Iran is the key here. The Iranians might also mistrust a re-emergent Russia, and while Tehran might be tempted to work with the Russians against the Americans, Iran might consider an arrangement with the United States — particularly if the United States refocuses its attentions elsewhere. On the upside, this would free the U.S. from Iraq. On the downside, the Iranians might not want —or honor — such a deal. Enter into negotiations with the Russians, granting them the sphere of influence they want in the former Soviet Union in return for guarantees not to project Russian power into Europe proper. The Russians will be busy consolidating their position for years, giving the U.S. time to re-energize NATO. On the upside, this would free the United States to continue its war in the Islamic world. On the downside, it would create a framework for the re-emergence of a powerful Russian empire that would be as difficult to contain as the Soviet Union. Refuse to engage the Russians and leave the problem to the Europeans. On the upside, this would allow the United States to continue war in the Islamic world and force the Europeans to act. On the downside, the Europeans are too divided, dependent on Russia and dispirited to resist the Russians. This strategy could speed up Russia’s re-emergence. Rapidly disengage from Iraq, leaving a residual force there and in Afghanistan. The upside is that this creates a reserve force to reinforce the Baltics and Ukraine that might restrain Russia in the former Soviet Union. The downside is that it would create chaos in the Islamic world, threatening regimes that have sided with the United States and potentially reviving effective intercontinental terrorism. The trade-off is between a hegemonic threat from Eurasia and instability and a terror threat from the Islamic world. We are pointing to very stark strategic choices. Continuing the war in the Islamic world has a much higher cost now than it did when it began, and Russia potentially poses a far greater threat to the United States than the Islamic world does. What might have been a rational policy in 2001 or 2003 has now turned into a very dangerous enterprise, because a hostile major power now has the option of making the U.S. position in the Middle East enormously more difficult.

If a U.S. settlement with Iran is impossible, and a diplomatic solution with the Russians that would keep them from taking a hegemonic position in the former Soviet Union cannot be reached, then the United States must consider rapidly abandoning its wars in Iraq and Afghanistan and redeploying its forces to block Russian expansion. The threat posed by the Soviet Union during the Cold War was far graver than the threat posed now by the fragmented Islamic world. In the end, the nations there will cancel each other out, and militant organizations will be something the United States simply has to deal with. This is not an ideal solution by any means, but the clock appears to have run out on the American war in the Islamic world.

We do not expect the United States to take this option. It is difficult to abandon a conflict that has gone on this long when it is not yet crystal clear that the Russians will actually be a threat later. (It is far easier for an analyst to make such suggestions than it is for a president to act on them.) Instead, the United States will attempt to bridge the Russian situation with gestures and half measures.

Nevertheless, American national strategy is in crisis. The United States has insufficient power to cope with two threats and must choose between the two. Continuing the current strategy means choosing to deal with the Islamic threat rather than the Russian one, and that is reasonable only if the Islamic threat represents a greater danger to American interests than the Russian threat does. It is difficult to see how the chaos of the Islamic world will cohere to form a global threat. But it is not difficult to imagine a Russia guided by the Medvedev Doctrine rapidly becoming a global threat and a direct danger to American interests.

We expect no immediate change in American strategic deployments — and we expect this to be regretted later. However, given U.S. Vice President Dick Cheney’s trip to the Caucasus region, now would be the time to see some movement in U.S. foreign policy. If Cheney isn’t going to be talking to the Russians, he needs to be talking to the Iranians. Otherwise, he will be writing checks in the region that the U.S. is in no position to cash.

The financial abyss is the deepest abyss of all; you can keep falling into it your whole life. -- Ilf and Petrov "The Golden Calf" (1931)

In the early years of the Soviet Union, Marxist policies for a "workers' paradise" wrought such devastation on the Russian economy that Vladimir Lenin was forced to restore certain aspects of market capitalism -- limited private ownership, trade with foreign countries -- to salvage the future of Bolshevism. The line above comes from a famous Russian satire about two scoundrels who took full advantage of the widespread corruption under the New Economic Policy (NEP) to accumulate illegal fortunes.

Fear of financial failure is a recurring nightmare for Russians, who recall with angst the collapse of the Soviet economy at the end of the 1980s. The following decade, in August 1998, a newly constituted Russian Federation defaulted on its government bonds as the ruble lost two-thirds of its value in less than a month, plunging the nation back into bankruptcy.

While humiliation still lingers in the national psyche, Russia has seemingly entered a new phase in its struggle to reconcile totalitarian tendencies with capitalist rewards. Today, oil revenues ostensibly provide a bulwark against economic losses caused by government misjudgments.

But even as Russian tanks assert a physical claim on Georgian territory, Moscow is already feeling the consequences in fiscal terms. Foreign investment capital -- the lifeblood of Russian equity and credit markets -- is draining out as the world recoils.

Group of Seven leaders should take particular note of this spontaneous market phenomenon -- and also take heart. Because no matter what sanctions the European Union might choose to impose, no matter how severely the world's leading industrialized nations jointly condemn their "fellow G-8 member" -- nothing will punish Russia more than to watch the dream dissolve yet again.

Vladimir Putin, who used to chase rats with a stick in the stairwell of his crumbling apartment block during his Leningrad boyhood, today seeks to thrash what he perceives as a hostile world order. He vows to "put an end to the unipolar world ruled by the U.S.," and has shown his willingness to raise the specter of financial ruin -- his nation's deepest fear -- to indulge this obsession.

The irony of the story, and the tragedy, is that Mr. Putin needs little assistance from the U.S. and its trans-Atlantic allies to destroy Russia's own standing in the international political and economic order.

The rout in Russian stock markets actually began before the invasion of Georgia, prompted by Mr. Putin's rumblings of despotic displeasure in late July. The shares of Mechel, one of Russia's leading mining and metals companies, plunged 38% on the New York Stock Exchange after Russia's prime minister publicly accused the company of selling raw materials to foreigners at lower prices than those charged domestically. Perhaps it was Mr. Putin's ominous advice (widely viewed as a sinister threat) to Mechel's owner and director, who was hospitalized at the time -- "I think Igor Vladimirovich should get better as quick as possible, otherwise we'll have to send him a doctor" -- that chilled investor sentiment, wiping out $6 billion in shareholder value in one day.

Only hours earlier, Robert Dudley, president of the Anglo-Russian energy company TNK-BP, was forced to flee Moscow after systematic harassment by government authorities. Locked in a power struggle for managerial control, the joint venture is Russia's third-largest oil producer; its Russian principals want to wring maximum cash payments out of the business while the British side argues for capital investment to increase future production. Analysts suspect the Kremlin is fully complicit in the effort to oust the foreigners -- denying visas to the company's British employees, launching tax investigations, tapping residential phones.

Since the attack on Georgia began in early August, the decline in Russian financial markets has accelerated sharply. The benchmark RTS Index of leading Russian stocks has slumped to its lowest level in two years. The ruble has registered its biggest monthly decline against the U.S. dollar in more than nine years as foreign investors rush to retrieve their capital -- some $25 billion in the last three weeks, according to French investment bank BNP Paribas. The amount of debt raised by Russian companies in August has fallen 87% from July levels. The issuance of new equity has come to a virtual halt -- a mere $3 million was raised in August compared to $933 million in July.

To combat the alarming magnitude of capital desertion, officials at Russia's central bank have scrambled to raise interest rates, allowing the yield on domestic ruble bonds to increase by 150 basis points. But complaints about the tightened credit situation have already begun among Russia's powerful industrial oligarchs. One of them, Vladimir Potanin, paid a recent visit to Mr. Medvedev to let him know that Russian companies' restricted access to world financial markets was causing difficulties. The billionaire businessman suggested that the government tap state reserves to ease the liquidity crisis. Mr. Medvedev quickly acquiesced, promising to unveil a new program of easy credit before the end of September.

It is part of the continuing pattern for Russia -- forever trying to have it both ways with "private" companies in cahoots with the Kremlin, entrepreneurial ambition subject to Big Brother's approval, and capitalism without democracy. It's a pattern that has consistently led Russia to blame outsiders for woes incurred as the result of its inherent dissonance, and to petulantly abandon earlier aspirations for global integration.

And it has always led to the financial abyss. Even now, the outlines of the old command-style economic blueprint are emerging as Mr. Putin promotes his 12-year development plan for the country. The foreign capital required to fund it is disappearing by the minute, however, which means the plan must be altered. Expect the nastiness to ratchet upwards as Mr. Putin wields his stick against his purported enemies. On Friday, he threatened to cut supplies to Europe of "oil, gas, petroleum chemicals, timber, metals, fertilizers" should it align with the U.S. in confronting Russian aggression against bordering nations. In Moscow, reports are circulating that Lukoil executives have been notified by the Kremlin to be prepared to restrict oil deliveries to Poland and Germany through the Druzhba pipeline. (In Russian, druzhba means "friendship" -- a perfect tribute to Orwellian doublespeak.)

What Mr. Putin has yet to learn is that capital does not respond well to extortion. Global investors are not impressed by economic threats to cut off supplies to vital customers. Indeed, they abhor the elevated "country risk" associated with political adventurism.

But what can the West do to express its rejection of such tactics? Preventing Russia from joining the World Trade Organization means little to a country that disdains the rules of free trade -- on Friday, Moscow banned poultry imports from the U.S. -- and blatantly circumvents antimonopoly policies. Russia's refusal to acknowledge intellectual property rights is consistent, if unscrupulous; according to researchers at the Brookings Institution, Mr. Putin plagiarized much of his dissertation for a Ph.D in economics in 1997 from a management study written by two professors at the University of Pittsburgh in 1978.

The most farsighted move Western governments could make would be to set up a fast-track approach to European Union membership for the most vulnerable of Russia's neighbors: Ukraine. As a parallel step, an interim monetary facility should be arranged to help the country make an early transition to the euro; if the EU balks, the U.S. should offer Kiev the opportunity to dollarize. Investors will be drawn to the stability and freedom of conducting business in a major reserve currency.

Mr. Putin, who harbors dreams of a vast ruble zone across the former Soviet empire, won't like it. But he has to understand: Sometimes the invisible hand strikes back.

The Kremlin has been dusting off old Bolshevik intimidation techniques since the U.S. signed a missile defense partnership with Poland last month. The Russian foreign ministry promised that its response "would go beyond diplomacy," and a Russian general mused that this meant its nuclear missiles would have to target Poland. Who would have thought such talk would find an accommodating ear in the U.S. Congress?

That will be the question when Illinois Republican Representative Mark Kirk offers an amendment in the coming days to the Defense Appropriations bill to restore funding for missile defense sites in Poland and the Czech Republic. The money was struck in May by Democrats who justified the cuts by claiming that the Iranian threat was not developing quickly and a deal with Poland hadn't been signed. Now Iran has tried to orbit its first satellite and a deal with Poland is in place, so we'll soon see if House Democrats and Barack Obama change with the new reality.

Even as Polish leaders were risking Russia's wrath by signing the U.S. deal, California Democrat Ellen Tauscher declared that the missile defense partnership was proceeding way too fast. Ms. Tauscher wrote on the left-wing Huffington Post last month that the U.S.-Polish pact would "build an ideologically-based system that is untested and certainly not ready, against a threat that has not yet emerged."

Ms. Tauscher chairs the House Strategic Forces Subcommittee and so can be a real obstacle to the Polish deal and other attempts to forge closer alliances with countries on the Russian periphery. Ditto for House Appropriations Defense Subcommittee Chairman John Murtha, who loves earmarks but can't see fit to help our Polish allies.

As distressing, these missile defense objections have been echoed by Barack Obama spokeswoman Wendy Morigi, who recently explained the Presidential candidate's position as "Congress will not and should not fund a system until testing has proven that it works, and that testing will not be completed until 2010 at the earliest."

The timing of these remarks couldn't have been worse. Polish leaders finally struck the missile deal, after months of national debate, in the wake of Russia's invasion of Georgia. The agreement is largely symbolic, since the 10 interceptors couldn't possibly stop a Russian attack and are really aimed at Iran. But the symbolism is still useful as a message to Moscow that its Georgian imperialism won't cower everyone in Eastern Europe. It is also an expression of Poland's confidence in America as an ally. "We're determined this time around to have alliances backed by realities, backed by capabilities," says Polish Foreign Minister Radek Sikorski.

On Monday, Mr. Sikorski met with Mr. Kirk and John McCain in Chicago to discuss missile defense in Poland. While some have questioned whether the deal signed in August will get through Poland's parliament, Mr. Sikorski tells us there will be no problem with ratification, most likely by the end of the year. On the other hand, U.S. failure to honor its new commitments to Poland would be disastrous to the country's faith in NATO. "We do feel that NATO should revive its role as a military organization," Mr. Sikorski notes.

The Tauscher-Obama objections will make Polish leaders wonder if their new agreement will be undercut by the next Administration, or in a Congress likely to be run by Democrats for years to come. And the comments will delight Vladimir Putin, who would like nothing better than to show Poles and Ukrainians that it's risky to trust the inconstant Americans.

The Pentagon has made significant progress in missile defenses this decade, and our allies are eager to participate in their development. Once sites are developed, either at home or abroad, they can be upgraded as the technology improves. The point of defenses is to deploy them before a threat is real, so we aren't caught by surprise. The Tauscher-Obama "ideologically-based" hostility to the Polish agreement helps to explain why a majority of Americans aren't sure they trust Democrats on matters of national security.

See all of today's editorials and op-eds, plus video commentary, on Opinion Journal.

Related Special Topic PageThe Russian Resurgence Russia is attempting to reforge its Cold War-era influence in its near abroad. This is not simply an issue of nostalgia, but a perfectly logical and predictable reaction to the Russian environment. Russia lacks easily definable, easily defendable borders. There is no redoubt to which the Russians can withdraw, and the only security they know comes from establishing buffers — buffers which tend to be lost in times of crisis. The alternative is for Russia to simply trust other states to leave it alone. Considering Russia’s history of occupations, from the Mongol horde to Napoleonic France to Hitler’s Germany, it is not difficult to surmise why the Russians tend to choose a more activist set of policies.

As such, the country tends to expand and contract like a beating heart — gobbling up nearby territories in times of strength, and then contracting and losing those territories in times of weakness. Rather than what Westerners think of as a traditional nation-state, Russia has always been a multiethnic empire, heavily stocked with non-Russian (and even non-Orthodox) minorities. Keeping those minorities from damaging central control requires a strong internal security and intelligence arm, and hence we get the Cheka, the KGB, and now the FSB.

Nature of the Budding ConflictCombine a security policy thoroughly wedded to expansion with an internal stabilization policy that institutionalizes terror, and it is understandable why most of Russia’s neighbors do not like Moscow very much. A fair portion of Western history revolves around the formation and shifting of coalitions to manage Russian insecurities.

In the American case specifically, the issue is one of continental control. The United States is the only country in the world that effectively controls an entire continent. Mexico and Canada have been sufficiently intimidated so that they can operate independently only in a very limited sense. (Technically, Australia controls a continent, but with the some 85 percent of its territory unusable, it is more accurate in geopolitical terms to think of it as a small archipelago with some very long bridges.) This grants the United States not only a potentially massive internal market, but also the ability to project power without the fear of facing rearguard security threats. U.S. forces can be focused almost entirely on offensive operations, whereas potential competitors in Eurasia must constantly be on their guard about the neighbors.

The only thing that could threaten U.S. security would be the rise of a Eurasian continental hegemon. For the past 60 years, Russia (or the Soviet Union) has been the only entity that has had a chance of achieving that, largely due to its geographic reach. U.S. strategy for coping with this is simple: containment, or the creation of a network of allies to hedge in Russian political, economic and military expansion. NATO is the most obvious manifestation of this policy imperative, while the Sino-Soviet split is the most dramatic one.

Containment requires that United States counter Russian expansionism at every turn, crafting a new coalition wherever Russia attempts to break out of the strategic ring, and if necessary committing direct U.S. forces to the effort. The Korean and Vietnam wars — both traumatic periods in American history — were manifestations of this effort, as were the Berlin airlift and the backing of Islamist militants in Afghanistan (who incidentally went on to form al Qaeda).

The Georgian war in August was simply the first effort by a resurging Russia to pulse out, expand its security buffer and, ideally, in the Kremlin’s plans, break out of the post-Cold War noose that other powers have tied. The Americans (and others) will react as they did during the Cold War: by building coalitions to constrain Russian expansion. In Europe, the challenges will be to keep the Germans on board and to keep NATO cohesive. In the Caucasus, the United States will need to deftly manage its Turkish alliance and find a means of engaging Iran. In China and Japan, economic conflicts will undoubtedly take a backseat to security cooperation.

Russia and the United States will struggle in all of these areas, consisting as they do the Russian borderlands. Most of the locations will feel familiar, as Russia’s near abroad has been Russia’s near abroad for nearly 300 years. Those locations — the Baltics, Austria, Ukraine, Serbia, Turkey, Central Asia and Mongolia — that defined Russia’s conflicts in times gone by will surface again. Such is the tapestry of history: the major powers seeking advantage in the same places over and over again.

The New Old-FrontBut not all of those fronts are in Eurasia. So long as U.S. power projection puts the Russians on the defensive, it is only a matter of time before something along the cordon cracks and the Russians are either fighting a land war or facing a local insurrection. Russia must keep U.S. efforts dispersed and captured by events as far away from the Russian periphery as possible — preferably where Russian strengths can exploit American weakness.

So where is that?

Geography dictates that U.S. strength involves coalition building based on mutual interest and long-range force projection, and internal U.S. harmony is such that America’s intelligence and security agencies have no need to shine. Unlike Russia, the United States does not have large, unruly, resentful, conquered populations to keep in line. In contrast, recall that the multiethnic nature of the Russian state requires a powerful security and intelligence apparatus. No place better reflects Russia’s intelligence strengths and America’s intelligence weakness than Latin America.

The United States faces no traditional security threats in its backyard. South America is in essence a hollow continent, populated only on the edges and thus lacking a deep enough hinterland to ever coalesce into a single hegemonic power. Central America and southern Mexico are similarly fractured, primarily due to rugged terrain. Northern Mexico (like Canada) is too economically dependent upon the United States to seriously consider anything more vibrant than ideological hostility toward Washington. Faced with this kind of local competition, the United States simply does not worry too much about the rest of the Western Hemisphere — except when someone comes to visit.

Stretching back to the time of the Monroe Doctrine, Washington’s Latin American policy has been very simple. The United States does not feel threatened by any local power, but it feels inordinately threatened by any Eastern Hemispheric power that could ally with a local entity. Latin American entities cannot greatly harm American interests themselves, but they can be used as fulcrums by hostile states further abroad to strike at the core of the United States’ power: its undisputed command of North America.

It is a fairly straightforward exercise to predict where Russian activity will reach its deepest. One only needs to revisit Cold War history. Future Russian efforts can be broken down into three broad categories: naval interdiction, drug facilitation and direct territorial challenge.

Naval Interdiction

Naval interdiction represents the longest sustained fear of American policymakers. Among the earliest U.S. foreign efforts after securing the mainland was asserting control over the various waterways used for approaching North America. Key in this American geopolitical imperative is the neutralization of Cuba. All the naval power-projection capabilities in the world mean very little if Cuba is both hostile and serving as a basing ground for an extra-hemispheric power.

The U.S. Gulf Coast is not only the heart of the country’s energy industry, but the body of water that allows the United States to function as a unified polity and economy. The Ohio, Missouri, and Mississippi river basins all drain to New Orleans and the Gulf of Mexico. The economic strength of these basins depends upon access to oceanic shipping. A hostile power in Cuba could fairly easily seal both the Straits of Florida and the Yucatan Channel, reducing the Gulf of Mexico to little more than a lake.

Building on the idea of naval interdiction, there is another key asset the Soviets targeted at which the Russians are sure to attempt a reprise: the Panama Canal. For both economic and military reasons, it is enormously convenient to not have to sail around the Americas, especially because U.S. economic and military power is based on maritime power and access. In the Cold War, the Soviets established friendly relations with Nicaragua and arranged for a favorable political evolution on the Caribbean island of Grenada. Like Cuba, these two locations are of dubious importance by themselves. But take them together — and add in a Soviet air base at each location as well as in Cuba — and there is a triangle of Soviet airpower that can threaten access to the Panama Canal.

Drug Facilitation

The next stage — drug facilitation — is somewhat trickier. South America is a wide and varying land with very little to offer Russian interests. Most of the states are commodity providers, much like the Soviet Union was and Russia is today, so they are seen as economic competitors. Politically, they are useful as anti-American bastions, so the Kremlin encourages such behavior whenever possible. But even if every country in South America were run by anti-American governments, it would not overly concern Washington; these states, alone or en masse, lack the ability to threaten American interests … in all ways but one.

The drug trade undermines American society from within, generating massive costs for social stability, law enforcement, the health system and trade. During the Cold War, the Soviets dabbled with narcotics producers and smugglers, from the Revolutionary Armed Forces of Colombia (FARC) to the highland coca farmers of Bolivia. It is not so much that the Soviets encouraged the drug trade directly, but that they encouraged any group they saw as ideologically useful.

Stratfor expects future Russian involvement in such activities to eclipse those of the past. After the Soviet fall, many FSB agents were forced to find new means to financially support themselves. (Remember it was not until 1999 that Vladimir Putin took over the Russian government and began treating Russian intelligence like a bona fide state asset again.) The Soviet fall led many FSB agents, who already possessed more than a passing familiarity with things such as smuggling and organized crime, directly into the heart of such activities. Most of those agents are — formally or not — back in the service of the Russian government, now with a decade of gritty experience on the less savory side of intelligence under their belts. And they now have a deeply personal financial interest in the outcome of future operations.

Drug groups do not need cash from the Russians, but they do need weaponry and a touch of training — needs which dovetail perfectly with the Russians’ strengths. Obviously, Russian state involvement in such areas will be far from overt; it just does not do to ship weapons to the FARC or to one side of the brewing Bolivian civil war with CNN watching. But this is a challenge the Russians are good at meeting. One of Russia’s current deputy prime ministers, Igor Sechin, was the USSR’s point man for weapons smuggling to much of Latin America and the Middle East. This really is old hat for them.

U.S. Stability

Finally, there is the issue of direct threats to U.S. stability, and this point rests solely on Mexico. With more than 100 million people, a growing economy and Atlantic and Pacific ports, Mexico is the only country in the Western Hemisphere that could theoretically (which is hardly to say inevitably) threaten U.S. dominance in North America. During the Cold War, Russian intelligence gave Mexico more than its share of jolts in efforts to cause chronic problems for the United States. In fact, the Mexico City KGB station was, and remains today, the biggest in the world. The Mexico City riots of 1968 were in part Soviet-inspired, and while ultimately unsuccessful at overthrowing the Mexican government, they remain a testament to the reach of Soviet intelligence. The security problems that would be created by the presence of a hostile state the size of Mexico on the southern U.S. border are as obvious as they would be dangerous.

As with involvement in drug activities, which incidentally are likely to overlap in Mexico, Stratfor expects Russia to be particularly active in destabilizing Mexico in the years ahead. But while an anti-American state is still a Russian goal, it is not their only option. The Mexican drug cartels have reached such strength that the Mexican government’s control over large portions of the country is an open question. Failure of the Mexican state is something that must be considered even before the Russians get involved. And simply doing with the Mexican cartels what the Soviets once did with anti-American militant groups the world over could suffice to tip the balance.

In many regards, Mexico as a failed state would be a worse result for Washington than a hostile united Mexico. A hostile Mexico could be intimidated, sanctioned or even invaded, effectively browbeaten into submission. But a failed Mexico would not restrict the drug trade at all. The border would be chaos, and the implications of that go well beyond drugs. One of the United States’ largest trading partners could well devolve into a seething anarchy that could not help but leak into the U.S. proper.

Whether Mexico becomes staunchly anti-American or devolves into the violent chaos of a failed state does not matter much to the Russians. Either one would threaten the United States with a staggering problem that no amount of resources could quickly or easily fix. And the Russians right now are shopping around for staggering problems with which to threaten the United States.

In terms of cost-benefit analysis, all of these options are no-brainers. Threatening naval interdiction simply requires a few jets. Encouraging the drug trade can be done with a few weapons shipments. Destabilizing a country just requires some creativity. However, countering such activities requires a massive outlay of intelligence and military assets — often into areas that are politically and militarily hostile, if not outright inaccessible. In many ways, this is containment in reverse.

Old Opportunities, New TwistsIn Nicaragua, President Daniel Ortega has proven so enthusiastic in his nostalgia for Cold War alignments that Nicaragua has already recognized Abkhazia and South Ossetia, the two territories in the former Soviet state (and U.S. ally) of Georgia that Russia went to war to protect. That makes Nicaragua the only country in the world other than Russia to recognize the breakaway regions. Moscow is quite obviously pleased — and was undoubtedly working the system behind the scenes.

In Bolivia, President Evo Morales is attempting to rewrite the laws that govern his country’s wealth distribution in favor of his poor supporters in the indigenous highlands. Now, a belt of conflict separates those highlands, which are roughly centered at the pro-Morales city of Cochabamba, from the wealthier, more Europeanized lowlands. A civil war is brewing — a conflict that is just screaming for outside interference, as similar fights did during the Cold War. It is likely only a matter of time before the headlines become splattered with pictures of Kalashnikov-wielding Cochabambinos decrying American imperialism.

Yet while the winds of history are blowing in the same old channels, there certainly are variations on the theme. The Mexican cartels, for one, were radically weaker beasts the last time around, and their current strength and disruptive capabilities present the Russians with new options.

So does Venezuelan President Hugo Chavez, a man so anti-American he seems to be even a few steps ahead of Kremlin propagandists. In recent days, Chavez has already hosted long-range Russian strategic bombers and evicted the U.S. ambassador. A glance at a map indicates that Venezuela is a far superior basing point than Grenada for threatening the Panama Canal. Additionally, Chavez’s Venezuela has already indicated both its willingness to get militarily involved in the Bolivian conflict and its willingness to act as a weapons smuggler via links to the FARC — and that without any heretofore detected Russian involvement. The opportunities for smuggling networks — both old and new — using Venezuela as a base are robust.

Not all changes since the Cold War are good for Russia, however. Cuba is not as blindly pro-Russian as it once was. While Russian hurricane aid to Cuba is a bid to reopen old doors, the Cubans are noticeably hesitant. Between the ailing of Fidel Castro and the presence of the world’s largest market within spitting distance, the emerging Cuban regime is not going to reflexively side with the Russians for peanuts. In Soviet times, Cuba traded massive Soviet subsidies in exchange for its allegiance. A few planeloads of hurricane aid simply won’t pay the bills in Havana, and it is still unclear how much money the Russians are willing to come up with.

There is also the question of Brazil. Long gone is the dysfunctional state; Brazil is now an emerging industrial powerhouse with an energy company, Petroleo Brasileiro, of skill levels that outshine anything the Russians have yet conquered in that sphere. While Brazilian rhetoric has always claimed that Brazil was just about to come of age, it now happens to be true. A rising Brazil is feeling its strength and tentatively pushing its influence into the border states of Uruguay, Paraguay and Bolivia, as well as into regional rivals Venezuela and Argentina. Russian intervention tends to appeal to those who do not feel they have meaningful control over their own neighborhoods. Brazil no longer fits into that category, and it will not appreciate Russia’s mucking around in its neighborhood.

A few weeks ago, Stratfor published a piece detailing how U.S. involvement in the Iraq war was winding to a close. We received many comments from readers applauding our optimism. We are afraid that we were misinterpreted. “New” does not mean “bright” or “better,” but simply different. And the dawning struggle in Latin America is an example of the sort of “different” that the United States can look forward to in the years ahead. Buckle up.

Medvedev Confronts U.S. on Missiles After Obama Win (Update1) By Sebastian Alison and Lyubov Pronina

Nov. 5 (Bloomberg) -- Russian leader Dmitry Medvedev said he would deploy new missiles in Europe, confronting the U.S. hours after Barack Obama won the American presidential election.

Medvedev said he would place a short-range Iskander missile system in Russia's exclave of Kaliningrad, wedged between Poland and Lithuania, to ``neutralize'' a planned U.S. missile-defense system ``if necessary,'' Medvedev said. A radio-jamming installation in Kaliningrad will also be aimed at elements of the U.S. system in Poland and the Czech Republic, he said.

In the annual state-of-the-nation address today in the Kremlin, Medvedev avoided mentioning Obama while highlighting areas of tension between the two countries. Russian-U.S. ties are at their frostiest since the end of the Cold War, frayed by the planned missile shield, the war in Georgia and the U.S. push to admit Georgia and Ukraine to the North Atlantic Treaty Organization.

``This is a warning to Obama -- a bright, clear warning -- that tough negotiations are ahead,'' Alexander Rahr, a Russia expert at the German Council on Foreign Relations in Berlin, said by telephone. Medvedev's ``fist-waving'' on the missile shield may be premature, since Obama has shown less support for the system than President George W. Bush, Rahr said.

Missile Shield

While Obama's positions on the war in Georgia and NATO's eastward expansion are similar to those of the Republican candidate, John McCain, and Bush, he has indicated greater flexibility on the missile shield.

Obama said he'll back the plan ``if it works and if it can be financially feasible,'' Michael McFaul, a Russia specialist at Stanford University who advised Obama during the campaign, said in an interview last month.

While announcing Russia's long-promised military response to the U.S. missile shield, Medvedev also expressed hope that Obama, unlike Bush, would engage with Russia on issues of common interest.

``Progress in Russian-American cooperation would be of critical importance,'' Medvedev said, adding that relations are going through a difficult period.

Medvedev said before the election that he was prepared to work with any new leader in Washington, though he expressed a veiled preference for Obama: ``It would be easier to work with people with a modern outlook, rather than those whose eyes are turned back to the past,'' he said. He congratulated Obama on his election victory by telegram, the Kremlin said.

Financial Crisis

The Russian leader renewed his criticism of the U.S. for the global financial crisis, saying that U.S. failure to coordinate its economic policy with other countries allowed a ``local'' crisis to cause ``a fall on the markets of the whole planet.'' He also said the U.S. provoked the war between Russia and Georgia in August, a position he had voiced before.

Medvedev chose the day when global attention was focused on the U.S. to announce a number of sweeping changes in domestic policy, including the extension of the Russian president's term in office to six years from four.

Russian presidents are now limited to two consecutive four- year terms. Putin, as president from 2000 until May of this year, strengthened the office by centralizing power. He became Medvedev's prime minister, and will be eligible to run in the next presidential contest.

Term Extension

``Increasing the term is timely,'' Finance Minister Alexei Kudrin told reporters after Medvedev's speech in Moscow today. ``It will allow the economy to work in a more stable manner. Six years is a good term.''

Medvedev said members of the State Duma, the lower house of parliament, should have their terms extended to five years from four, and that the government should report to parliament on an annual basis.

On the global financial crisis, Medvedev said the U.S., the European Union and the so-called BRIC countries -- Brazil, Russia, India and China -- must work together to create an economic system that will be ``more fair and more secure.'' He added that ``we must radically reform the political and economic systems. Russia, at all events, will insist on this.''

Medvedev travels to Washington on Nov. 15 for a summit on the financial crisis. Presidential spokeswoman Natalya Timakova said last week that no decision had been made on whether Medvedev would meet the new president during his visit.

`Barbaric Aggression'

His calls for a new global order come after the worst month for Russian investors in a decade. The 50-stock RTS Index dropped 36 percent in October, the biggest monthly decline since the government devalued the ruble and defaulted on domestic debt in 1998. Investors have withdrawn about $140 billion from Russia in the last three months, according to BNP Paribas SA.

Medvedev began his address in the Kremlin by blaming the U.S. for Russia's five-day war with Georgia in August, which followed attempts by President Mikheil Saakashvili to take by force the breakaway region of South Ossetia.

``The barbaric aggression against South Ossetia'' was encouraged by the U.S. and Russia's military response was used by NATO as an excuse to send warships to the Black Sea, Medvedev said.

To contact the reporter on this story: Sebastian Alison in Moscow at Salison1@bloomberg.net; Lyubov Pronina in Moscow at lpronina@bloomberg.net

While President-elect Obama basks in the glow of his electoral victory, our adversaries are apparently working on that "test" that Joe Biden talked about.

Just hours after Mr. Obama president-elect, Russia announced that it will base surface-to-surface missiles within range of our planned missile defense site in Poland.

According to Russian President Dimitry Medvedev, Moscow will deploy short-range SS-26 Iskander missiles in the Kaliningrad region to "neutralize" the planned missile defense system. He also stated that Russia plans to jam a radar located in the Czech Republic, used to detect in-bound missiles and guide the Polish-based interceptors.

With a range of at least 400 km, Iskander missiles based in Kaliningrad would be able to target the defensive site in Poland. The proposed deployment is the most serious challenge to U.S. plans to base missile defenses in eastern Europe. Washington has stated (repeatedly) that the defensive shield is designed to protect the continent from missiles launched from rogue states, such as Iran. Moscow rejects that argument, claiming that the system is actually aimed at Russia.

While Moscow has long opposed U.S. missile defenses in Europe, the timing of today's announcement is no accident. Mr. Medvedev and his political puppet master, Vladimir Putin, are quite aware of yesterday's election results in the United States. With the departure of George Bush, who championed the deployment, the Russians are mounting a challenge to his successor, who is opposed to "unproven" missile defense systems.

In some respects, the SS-26 movement to Kaliningrad is the first "shot across the bow" of the incoming administration. Moscow is waiting to see if Obama has "steel in his spine," and will stand up to a deliberate Russian provocation. So are our eastern European allies, who wonder if the new president will stand with them against the Russian bear.

***On a related note, Iran is warning the U.S. "not to violate its airspace." Get ready for that 3 a.m phone call.

FWIW my current thinking is that Bush has left the US in a bad position with Russia by badly overplaying our hand and by not understanding what was at stake.

He should have expanded our military back in 2004 as his opponent Senator Kerry said-- but he was too fcuking full of hubris to admit that we needed to do so.

THEN he kept on treating Russia like we weren't extended and could extend right up to their borders.

He failed to appreciate that what Russia's play in Georgia was about was about Central Asian gas and oil. See e.g. my post today in the Russia Big Picture (or something like that) thread.

So, while I certainly agree that McCain would be a far better president-elect to have at this moment and that we may soon come to deeply regret having an utter neophyte at the helm, as an American my first concern is what AMERICA should do.

The whole Russia issue was neglected since the Clinton administration. Putin has been subtly making moves, prepping the environment, waiting for his moment. Now the guy that should be wearing the trainee hat is about to be running things, Putin sees his chance to force us to turn tail and abandon our allies.

What can we do? We can show the weakness that europe loves or hold our ground and see who blinks first. Don't think that others aren't watching carefully, waiting to see if Obama isn't just as weak and inept as I/they expect.

In the wake of the collapse of the Soviet Empire, I think it understandable for the US (not just Clinton) to have relaxed mentally. OTOH Bush, with alleged Russian expert Condi Rice at his elbow, chose to pursue a very particular policy and signs were there to see e.g. Kosovo. If we weren't busy elsewhere it may well have been a valid approach, but we WERE busy elsewhere and IMHO he badly overplayed our hand. It IS an ugly situation that BO has inherited and I fear he will make it uglier.

I hated what the Dems did to Bush over Iraq and I AM A BETTER AMERICAN THAN THE DESTRUCTIVE ONES WERE-- so for me the frame of referenceis what is good for America.

The decline of oil prices and continuing Russian demographic weakness suggest that we need not run for the hills just yet

Here's this from today's WSJ:

Obama's Russia Test Article more in Opinion »Email Printer Friendly Share: Yahoo Buzz facebook MySpace LinkedIn Digg del.icio.us NewsVine StumbleUpon Mixx Text Size 'Mark my words. It will not be six months before the world tests Barack Obama. . . . I guarantee you it's gonna happen." Joe Biden's famous campaign gaffe-as-prophecy was off by six months. How Mr. Obama responds to the Kremlin's provocation this week will offer an important glimpse of his Administration's approach to foreign policy.

In the yearly state of the nation address on Wednesday, President Dmitry Medvedev blamed the Georgia war, Russia's tanking markets and declining bilateral relations on a "selfish" and "mistaken, egotistical and sometimes simply dangerous" America. Presumably for effect, the national address was moved from last month to Wednesday, and started and ended with anti-U.S. tirades.

The Russian President also announced plans to deploy missiles in the Kaliningrad enclave between NATO members Poland and Lithuania unless America drops plans to deploy missile defenses in Europe. He added that Russia would jam U.S. radar. This would be an act of war if an Iranian missile, the intended target of the defenses, slipped through the net and hit America or its allies.

The U.S. struck agreements with Poland and the Czech Republic to put missile interceptors and radar on their territory after long negotiations. The countries agreed at some political risk, and clearly the Kremlin is hoping it can intimidate the new Administration into disavowing that commitment. It bears repeating that the system in no way diminishes Russia's own nuclear deterrent.

The State Department responded with its typical thunder, calling the speech "disappointing." President Bush, the U.S. head of state for another two-plus months, has said nothing. Mr. Obama's aides say the President-elect doesn't want to undermine Mr. Bush during the transition, and is focused on building his Administration.

That's fine. But he could help U.S. interests and himself merely by putting on record that an Obama-led America won't be intimidated by threatening outbursts from Russian leaders and will be a reliable partner to its allies in Europe. Any hint of doubt from the next Administration on this point will send shivers through our NATO allies and encourage more bad behavior by Russia and others. The Kremlin is doing Mr. Obama a favor by testing him so early.

All the more because Congressional Democrats have given the impression that U.S. support for Poland or NATO aspirants Ukraine and Georgia is negotiable. Money for the missile defense program was struck in May by Democrats who claimed the threat from Iran wasn't materializing quickly and a deal with Poland hadn't been signed. Some funding was restored after Poland agreed to host 10 missile-defense interceptors in August. We also hear from liberal quarters that America really is to blame for the deteriorating relationship with Moscow. The Kremlin has heard that too.

No matter who's in charge at the White House, the U.S. won't easily get along with a Russia that chokes off political freedoms at home and threatens neighboring democracies. Fortunately, America has built up strong alliances with free European countries that are, in turn, now willing to help defend the U.S. and Europe against a rogue missile threat. It'd be nice to hear from the next President that he stands by these alliances.

DIMA KOROTAYEV/AFP/Getty ImagesTopol-M mobile intercontinental ballistic missilesSummaryThe bilateral strategic arms control regime between the United States and Russia — essentially static for many years — could be revitalized in 2009. In December of next year, the so-called START I treaty between the United and Russia will expire, and both sides have a keen interest in its extension and ultimate replacement.

The Russian Resurgence

“The Treaty between the United States of America and the Union of Soviet Socialist Republics on the Reduction and Limitation of Strategic Offensive Arms” (known colloquially as START I) will expire on Dec. 5, 2009. Though real substantive action is unlikely before President-elect Barack Obama enters office, some meaningful action on a bilateral strategic arms agreement between the United States and Russia may be on the horizon.

The expiration of START has been anticipated for years now, but Washington has shown little interest in moving forward on strategic arms control. Even before the 9/11 attacks, the U.S. national security establishment was struggling with a deep uncertainty about the need for nuclear deterrence in the post-Cold War world and no longer wanted to be locked into a highly structured and inflexible treaty governing force structure.

START I, crafted just before the Soviet collapse, is characteristic of Cold War-era treaties — complex, detailed and entailing a rigorous declaration, inspection and verification regime. By comparison, the Strategic Offensive Reduction Treaty (SORT, also known as the Moscow Treaty), signed in 2002, is an astonishingly short document, amounting to a single page. This brevity was possible (and, more important, the treaty was verifiable) because SORT was underpinned by the START I regime. SORT will not endure much beyond the expiration of START I, requiring only that on the last day of 2012 the United States and Russia shall have an aggregate number of deployed strategic warheads of between 1,700 and 2,200 apiece.

This specific range of aggregate warhead totals — 1,700 to 2,200 — actually came from a Pentagon study on post-Cold War requirements for an effective nuclear deterrent. Essentially, the White House took what the Pentagon wanted to do anyway and crafted a treaty asking Russia to do the same thing.

Related LinksGeopolitical Diary: New Questions About Nuclear Sustainability Nuclear Weapons: Devices and Deliverable Warheads Nuclear Weapons: The Question of Relevance in the 21st Century Nuclear Weapons: Terrorism and the Nonstate Actor But both Washington and Moscow want something here. The United States — despite its strong desire for maximizing flexibility — does recognize the value of a long-term, verifiable and stable nuclear balance with Russia. With a properly tailored regime of regular declarations and inspections, the Pentagon can establish, with an acceptable degree of confidence, the status of Russia’s nuclear forces and significantly reduce the burden on operational forces to monitor and hedge against the unknowns. Despite the fact that it won the Cold War, the United States has no interest in going back to the days of nuclear brinkmanship. It has become accustomed to and welcomes the ongoing stability of the post-Cold War nuclear balance, so long as it retains enough flexibility to have options for dealing with other nuclear powers.

Thus, while the United States seems interested only in something loose like SORT, a somewhat longer document (though significantly shorter than START I, if Washington has its way) will almost certainly be necessary to establish declaration, inspection and verification regimes that will ensure an acceptable degree of confidence in the fidelity of both sides. Washington considers this an opportunity to set aside START I and tailor a regime for the 21st century. But if that agreement cannot be crafted quickly, an extension of START I may be considered — if only to bridge the gap.

For Russia, there is a strong desire for a long-term cap on the size of the U.S. nuclear arsenal. Moscow remembers all too well how U.S. defense spending during the Reagan years helped drive the Soviet Union into the ground. Russia is well aware that it cannot hope to compete in another arms race with the resources and raw economic power of the United States.

Meanwhile, old age is wreaking havoc on Moscow’s nuclear arsenal, where delivery systems are becoming increasingly archaic and nowhere near enough replacements are being produced fast enough to sustain the arsenal. Thus, the further Russia can convince the United States to reduce its own arsenal, the more obtainable a long-term arsenal quantitatively comparable to Washington’s can be.

But while the Kremlin signed SORT from a position of weakness, Moscow today sees an opportunity to approach the United States from a position of strength. In 2009, Russia will come to the table having consolidated its political, economic and military power under the tenure of President (now Prime Minister) Vladimir Putin and having essentially annexed two secessionist territories from Georgia. Russian President Dmitri Medvedev’s Nov. 5 State of the State address was filled with defiance — not the least because, from the Kremlin’s point of view, not only is Obama amenable to such an agreement but he also will be weak in dealing with Russia and peripheral states of the former Soviet Union. (Whether this proves to be the case is another question.)

At the end of the day, the Kremlin will want a new agreement. But it will not be rubber-stamping any numbers brought directly from the Pentagon this time around. It will push for a more rigorous treaty that keeps the scale of the U.S. arsenal down and constrains Washington’s flexibility. And it will push hard — or use concessions as a lever — to challenge the proposed U.S. ballistic missile defense installations slated for Poland and the Czech Republic.

Russia locating new missile launchers near a missile defense site? Sounds like a problem already solved. Also sounds like George Bush proved right at least this once by history and events. Obama (version 1.0) opposed missile defense (and favored tax increases). Somehow he figured out to 'delay' tax increases in a challenged economy. Maybe he will also 'delay' unilateral disarmament, especially the defensive systems, until the Soviet resurgent, KGB-run, nuclear warhead missile threat subsides.

My solution would be to match Russia's recognition of South Ossetia with our recognition of Kaliningrad. If they declare independence, join the EU and NATO, maybe they can keep the missiles aim them a different direction.

Geopolitical Diary: Russia, Obama and the S-300December 18, 2008There has been extensive discussion of the idea that U.S. President-elect Barack Obama might be tested early in his term by foreign powers, much as other presidents have been tested. If reports in the Russian media are correct, Obama’s first test is starting to take shape: According to RIA Novosti news agency, Russia is in the process of “implementing a contract” that would ultimately deliver the S-300 strategic air defense system to Iran.

Rumors concerning the S-300 have been on-again, off-again for years, but RIA Novosti reported that “Moscow has earlier met its obligations on supplying Tor-M1 systems to Iran and is currently implementing a contract to deliver S-300 systems.” The news agency also quoted Alexander Fomin, deputy head of the federal agency in charge of Russia’s military exports, as saying, “Russia’s military and technical cooperation with Iran has a positive impact on stability in this region.” Fomin added, “We have developed, are developing and will continue to develop this cooperation further. The region’s security to a large extent depends on this.” The article follows reports that an Israeli military delegation traveled to Moscow in recent days to try to dissuade Russia from delivering the weapons.

The importance of the S-300 — specifically the more modern PMU series — is that it would increase the difficulty of air attacks against Iran. The first stage of any attack is the suppression of enemy air defenses (SEAD). Except in the case of a sudden attack on a single target, SEAD is a precursor to any sustained air campaign, and given the relatively large number of Iranian nuclear sites, taking out those facilities would involve such an extended campaign. Having to suppress a series of S-300PMU batteries would extend substantially the number of sorties and the time required for this phase of the attack.

This would affect both Israeli and American calculations. Given the size of Israel’s air force and the distances involved, the additional attrition and time involved in the SEAD phase might well extend an Iran campaign beyond Israel’s capabilities. It is not clear whether the S-300 would take a conventional Israeli option off the table, but it certainly would make things more difficult should Israel decide to carry out the attack. The United States would have greater ability to make such a move, but Washington’s recent agreement with Baghdad stipulates that Iraq cannot be used as a base for attacks against neighboring countries. And the Turks do not want the Americans to attack Iran from their soil. Put simply, the introduction of the S-300 would push the difficulty of a non-nuclear attack to the limit for Israel and complicate matters for the United States.

Of course, this is what the Russians mean to do. We do not know what happened during the conversations U.S. Sen. Richard Lugar and former secretary of state Henry Kissinger held in Moscow in recent days, but the Russians clearly have decided to turn up the heat. Russia has shifted its position from not wanting to increase tensions through the sale of the S-300 to seeing the sale as stabilizing the region — which it would do at the expense of potentially reducing U.S. and Israeli options.

Moscow does not want the Iranians to have nuclear weapons, but the Russian view is that the Iranians are rather far away from developing them. The more important issue for Russia is forcing the Americans to recognize Moscow’s sphere of influence in the former Soviet Union - by withdrawing their support for Ukraine, Georgia and other countries in the region. For the United States, the Iranian issue has been a priority. The Russians have just made it clear that if the Americans do not give them what they want, they will complicate U.S. policy on Iran as much as they can.

Obama takes office in about a month. It is not clear what point the Russians have reached in actually transferring S-300s, but in a month’s time, they could be either on the verge of transferring or already in the process. That means Obama will be forced to respond very quickly to Russia’s action. His options include forcing some sort of confrontation with the Russians; doing nothing, and thus accepting Russia’s intrusion into a core American interest; moving rapidly to deal with Iran; or (and we doubt intensely that he would choose this option) moving to strike Iran before the S-300s become operational.

It may be that American defense analysts will conclude that the S-300 does not significantly affect the balance of power in the region. But the S-300 does affect the psychological balance. The Iranians will feel that they are far less isolated than the Americans want them to feel, and that change alone will have a significant effect. Whether viewed militarily or politically, Russia’s action matters.

This is not a situation on the scale of the Cuban missile crisis, but it is a significant challenge to American interests on Russia’s part. If Obama does nothing, he will be seen as weak; if he gives the Russians what they want, he will be seen as an appeaser. And if he moves toward a major crisis or even military action, he will be seen as overly aggressive. With this move, Russia’s aim was to push Obama into a corner and say, in Russian, “Welcome to the big leagues.”

By LEON ARONRussia faces a particularly nasty version of the global recession (at a minimum), and perhaps an economic "perfect storm." Regardless of how bad its economy gets, two broad political trends, each carrying profound implications for Russia's foreign policy and U.S.-Russian relations, are bound to emerge.

David KleinThe first will be a growing dissatisfaction with the government, which may lead to a political crisis. The second will be a reactionary retrenchment: increased internal repression and more of its already troubling foreign policy. Managing the relationship with Moscow in the face of these trends is something President-elect Barack Obama and his administration should start thinking about now.

The size and depth of Russia's economic problems -- and thus the amount of political turbulence -- will depend primarily on two variables. The first is the ruble decline. The national currency is steadily depreciating and has reached an all-time low against the euro despite the central bank's having spent $161 billion on its defense since mid-September. The ruble's losing at least 25% to 30% of its value is a given; the key political issue is whether the weakening can be managed into a gradual decline, or whether the depreciation turns into a panicky flight from the currency. (Already last September Russians dumped around 160 billion rubles to buy $6 billion -- the highest demand for dollars since the aftermath of the 1998 financial crisis.)

The second factor is oil prices. Last year, oil revenues accounted for at least one-fifth of Russia's GDP and half of state revenues. At $40 a barrel, the state budget goes into a 3%-4% deficit. In the past eight years, the national economy has mirrored fluctuating oil prices. So the 7%-8% growth projected for 2008 will have to be cut at best to 1%-2% for 2009. Zero growth or contraction are distinct possibilities.

The Opinion Journal WidgetDownload Opinion Journal's widget and link to the most important editorials and op-eds of the day from your blog or Web page.Such a predicament is most dangerous politically for a country whose population has become used to incomes increasing 8%-10% every year since 2000. Growing disappointment is sure to follow, first among the elites and then people at large.

Despite the reduction of the poverty rate to 14% from 20% in the last five years, tens of millions of Russians continue to live precariously: A recent poll found that 37% of all families have money enough only to cover food. Unemployment and inflation (already 14%, year-on-year, in November) may well push these people over the edge and into the streets.

Perilous for any regime, such disenchantment would be especially worrisome in a country where the legitimacy of the entire political structure appears to rest on the popularity of one man, Vladimir Putin, whose astronomic ratings stemmed largely from the relative economic prosperity he has presided over. This dangerously narrow legitimacy will be sorely tried in the coming months.

Forestalling or at least containing inevitable political consequences of the economic crisis is likely to be at the root of the other political tendency: an attempt by the Putin-led elite, coalesced around Gazprom, Rosneft, state corporations and the loyal industrial "oligarchs," to pre-empt challenges by beefing up the authoritarian "vertical of power." The rewriting of the constitution to give the president 12 consecutive years in office signals the implementation of this strategy. The amendment was overwhelmingly passed by both houses of the Federal Assembly within three weeks in November, ratified by all 83 regional parliaments in less than a month. President Dmitry Medvedev signed it into law yesterday.

One scenario bruited about in Moscow has Mr. Medvedev taking full responsibility for the crisis and resigning to free the Kremlin for the caretaker prime minister (Mr. Putin), soon to be re-elected president.

A bill introduced in the Duma on Dec. 12 expands the definition of treason, punishable by up to 20 years in prison, to "taking action aimed at endangering the constitutional order, sovereignty and territorial integrity" of Russia. That same day the parliament approved the elimination of the right to jury trials for defendants charged with treason. The ruthlessness with which the riot police troops, the OMON, attacked protesters, journalists and bystanders in Vladivostok over the weekend of Dec. 20 may be a preview of things to come.

Russia's Woes Spell Trouble for the U.S. – Lee AronThe Minnesota Recount Folly: We've Been Down That Road – Trent EnglandInstant Info Is a Two-Edged Sword – Paul H. RubinFree Trade Should Be Part of the Stimulus – James BacchusA reactionary crackdown will also mean the continuation and intensification of the already incessant and deafening propaganda portraying Russia as a "besieged fortress," surrounded by the U.S.-led enemies on the outside and undermined by the "fifth column" of the democratic political opposition within. In the words of one of the most astute independent columnists, the courageous Yulia Latyinina, the rabid anti-Americanism, which has become a linchpin of the regime's domestic political strategy, is likely to turn into a full-blown "hysteria."

The key lesson of George W. Bush's dealings with Russia is that the Kremlin's foreign policy priorities are determined by the changing ideology and the domestic political agenda of Russia's rulers to a far greater degree than by anything the U.S. does or does not do. (Which is why the U.S. exit from the antiballistic missile treaty was accepted with equanimity in 2002, while the intent to install a rudimentary antimissile system provoked Moscow's fury in 2007.) If reaction advances at home, the Kremlin will continue a truculent or outright aggressive foreign policy of resurgence and retribution, intended, among other things, to distract from and justify domestic repression. The recovery of geostrategic assets lost in the Soviet collapse will remain Moscow's overarching objective, especially in the territory of the former Soviet Union.

The Obama White House will have to navigate a difficult and narrow path in its relations with Moscow in 2009 between continuing to engage Moscow on the key issues of mutual concern (Iran, missile defense, nonproliferation, terrorism), on the one hand, and the broader strategic goal of assisting democratic stabilization in Russia.

But no matter what the Kremlin leaders and their propaganda stooges say in public, anything interpreted as approval or even a mere sign of respect by America, first and foremost by its president, is a huge boost to the government's domestic popularity and legitimacy. So the natural, almost protocol-dictated, inclination of the new administration to show good will must be balanced against firm support for the return to political and economic liberalization in Russia. Throwing diplomatic lifelines to a regime that refuses to choose such a path out of the crisis is not in America's -- and Russia's -- long-term interests.

Mr. Aron is director of Russian studies at the American Enterprise Institute and the author, most recently, of "Russia's Revolution: Essays 1989-2007" (AEI, 2007).

The Russia-NATO Council will meet on Monday for its first gathering since the Russo-Georgian war in August 2008. The official agenda calls for discussions between the NATO ambassadors and Russian Ambassador to NATO Dmitri Rogozin on the fallout from the war. However, this topic is ancient history in the minds of most of the alliance members and Russia.

There is a much bigger and more important topic on the table: NATO needs supplementary routes to get supplies to troops to Afghanistan and is looking to create routes that transit Central Asia — an area where Russia is czar.

We have been closely following the actions of the United States, the Central Asian states and Russia over this issue. The recent moves began with a meeting in early December between two heavyweights, Russian Prime Minister Vladimir Putin and Henry Kissinger, an unofficial White House adviser. This meeting did not seem to go well: In the days following, Russia announced a number of defense deals with countries unfriendly to Washington, like Iran. But a shift occurred soon afterward, when the United States began to pursue negotiations with the Central Asian states — with a tour by U.S. Central Command chief Gen. David Petraeus — without Russia’s blessing. Russia began countering the United States’ moves this past week and will continue to do so, with a series of meetings in the same states over the next two weeks.

Negotiations have never moved so quickly on matters concerning Central Asia. This part of the world tends to move at a much slower pace, dragging out meetings and decisions — especially on security deals — for years. Security negotiations between the United States and Russia have rarely moved this fast either since the two powers divided up allies after World War II. But the moves are aggressive now, because Washington needs to lock down a new supply route leading from Central Asia to Afghanistan now rather than later.

Petraeus faces a deadline for submitting his team’s strategy on Afghanistan to U.S. President Barack Obama and the Joint Chiefs of Staff. This document is mainly a strategy piece laying out the core objectives for the year — everything from denying Pakistan leverage to undermining the Taliban’s support in key districts. The logistics and tactical details of alternate supply routes do not necessarily have to be included in this document, but having an alternate supply route plays into every other detail.

The other reason for accelerating negotiations for an alternative route is that the U.S. military’s plan to increase troops in Afghanistan is now in motion. The United States and NATO feel that they rely too heavily on routes through Pakistan, along which roughly 75 percent of supplies to Afghanistan travel. The immense logistical demands of the operations already under way — let alone the increased operations Washington has planned — are well beyond the capacity of aerial resupply alone.

By the time the spring thaw arrives, U.S. and NATO and Taliban offensives will be in full swing. The Pentagon will be surging troops into Afghanistan as fast as possible. That surge will require even more vehicles, more ammunition, more fuel, more food and supplies, spare parts and the like — some of which will need to begin arriving ahead of the troops that will be using them.

Simply to keep reliance on Pakistani routes from increasing, some alternative arrangement is necessary. Based on Petraeus’ recent trip and other maneuvers, a Central Asian route is the clear priority. And time is of the essence. But an arrangement with Russia almost certainly will be needed to secure acquiescence from states in that region.

The Americans and Russians are spending more time countering each other than finding a deal. They have not yet met with each other since the Central Asians were brought into the negotiations. They will meet at the Russia-NATO Council on Monday, but Moscow is not looking for talks that are not between those at the top. This means Russia wants to meet with either Obama or new Secretary of State Hillary Clinton. Rumors have been flying of upcoming meetings, but every time the United States offers to meet, the Russians swerve as if the negotiations were a game.

This is because the Russians know that the Americans are in a hurry. The Russians feel they are in a position of strength and that they can keep drawing the matter out until the United States comes to the table with an enticing deal. This would involve much larger issues than Afghanistan: It means movement between Washington and Moscow over the future of all former Soviet turf. Until then, the Russians are going to savor having the upper hand while the United States scrambles.

Russia may be flexing its military muscle once again, sending warships into international waters and dispatching long-range bombers on reconnaissance trips, but the former superpower remains a paper tiger, a respected London think-tank has concluded.

The recent warship manoeuvres in the Mediterranean and Latin America were just “symbolic” gestures, carried out by the former maritime giant that was able to deploy only a small number of ships while the rest of the fleet was tied up at home without enough money to keep them in business, the International Institute for Strategic Studies (IISS) said.

In February last year, a naval force led by the carrier Admiral Kuznetsov completed a two-month deployment, including a period in the Mediterranean – one of the longest of its kind since the Cold War, the IISS said in its annual Military Balance. A second naval deployment took place in October en route to an exercise with the Venezuelan Navy, and a Russian warship has joined the anti-piracy patrols in the Gulf of Aden.

Oksana Antonenko, senior fellow for Russia and Eurasia at the institute, however, told a press conference at the launch of the Military Balance: “In military terms it was all very modest. This is not a major military comeback, it was just a symbolic deployment.”

She cast doubt on Russia’s ability to project force, and despite the “victory” of Russian troops in Georgia last August, their performance had highlighted their limited capabilities. She predicted that next year Moscow’s defence budget would suffer from an even greater deficit. “It’s hard to envisage a substantial increase in defence spending,” she said.

The IISS assessment clashes with the high-profile foreign policy approach adopted by Vladimir Putin, the Russian Prime Minister. There was not enough money, she said, for Russia to achieve what it wanted in military terms.

There was also “a lack of consensus” between different sections of the Russian Armed Forces, with some elements of the army hierarchy wanting to remain focused on territorial defence, and the nuclear establishment insisting on the Army training for force projection beyond Russia’s security borders.

Radical reform, however, was being introduced, with the aim of converting the “top-heavy divisions” into more flexible brigades, and the Military Balance said that national pride in Russia’s military forces was being restored.

Russia remained “very sensitive”, Ms Antonenko said, to Nato’s enlargement programme, particularly since Georgia and Ukraine had been put on the list of potential new members of the alliance. Dialogue with the Russian military was suspended after the brief war in Georgia and is only now being reinstated.

Ms Antonenko, however, said that there was no clear understanding in Moscow of what Nato was trying to do with its enlargement programme, and she called for a totally different dialogue between Russia and the alliance. Up until now there had only been a “virtual relationship” with Moscow.

She saw signs of a better working arrangement with the announcement that Russia was willing to consider allowing Nato to use a northern corridor through Russian territory for ferrying supplies to alliance troops in Afghanistan.

John Chipman, director-general and chief executive of IISS, said that in the aftermath of the conflict in Georgia, the Russians had announced plans for radical reforms, including turning the Army into a fully professional force. “This restructuring could make Russian armed forces more capable to operate against modern threats and potentially better interoperable with western forces,” he said.

frigging russians. they cost my company several large aerospace contracts in Georgia last summer. I'm looking forward to the day that the muslims turn on them as all rabid, gutless ungrateful animals do.

Something some of you may not know, The Republic of Georgia is the home to one of the largest populations of Jews outside of Israel and has existed in place longer then any other. One of the partners of our families firm is Israeli and set us up there to do business. Wonderful people, i think they felt betrayed by the west when Russia rolled them and the western media falsely reported events there. The russians and muslims instigated that whole mess. The russians and their puppets have been shelling them since the fall, assassinating politicians and intimidating Georgians living on the border. Not one event has made it into the MSM.

MOSCOW (Reuters) - Russia has halted plans to deploy missiles near the Polish border, a Russian news agency quoted the military as saying on Wednesday, in the clearest sign yet Moscow is seeking better ties with the new U.S. administration.

Moscow had threatened to deploy the missiles to counter a missile shield proposed by former President George W. Bush for eastern Europe. President Barack Obama has not reversed Bush's decision but has said he would consider it on its merits.

Analysts said if confirmed the Russian move -- which follows a phone conversation this week between Obama and Russian President Dmitry Medvedev -- could open the way for renewed dialogue on other issues that divide their countries.

"The earlier Russian announcement that they were going to deploy missiles ... and point them at NATO allies was unwelcome. If that decision has now been rescinded, it is a good step," said NATO spokesman James Appathurai.

The U.S. envoy to NATO had earlier said that, if confirmed, the Russian move would be a "positive step."

Medvedev said a day after Obama's election victory he was ordering the deployment of Iskander missile systems to Russia's Western outpost of Kaliningrad, which borders European Union members Poland and Lithuania.

"The implementation of these plans has been halted in connection with the fact that the new U.S. administration is not rushing through plans to deploy" elements of its missile defense shield in eastern Europe, Interfax quoted an unnamed official in the Russian military's general staff as saying.

It was not clear though if the report represented a firm shift in policy. There was no confirmation from the Russian military that the Iskander deployment was being suspended and a Kremlin official said he could not offer immediate comment.

The threat of deploying the Iskander missiles was largely symbolic because, military analysts said, Russia does not have enough operational missile systems to station in Kaliningrad.

The missile issue is likely to be on the agenda if, as expected, Medvedev and Obama meet on April 2 on the sidelines of a Group of 20 summit in London.

"It (the suspension of missile deployment) is a signal to Obama of Moscow's goodwill," Yevgeny Volk, an analyst in Moscow with the Heritage Foundation think tank, told Reuters.

"In response they want a decision not to deploy the missile defense shield in eastern Europe."

Obama also faces a series of other challenges in dealing with Russia, including bridging differences over Iran, NATO expansion and strategic arms control.

Some observers believe the Kremlin may be softening its assertive foreign policy style because the economic slowdown -- which has seen the rouble lose about a quarter of its value since July -- has dented its confidence.

U.S. POLICY SHIFT?

The administration of former U.S. President George W. Bush angered the Kremlin with its push to deploy interceptor missiles in Poland and a radar in the Czech Republic.

It said the system was needed to protect from potential missile strikes by what it called "rogue states" -- specifically Iran and North Korea.

The White House has not announced any change of policy on the missile shield, but a nominee for a top Pentagon post in the Obama administration said this month the plan would be reviewed as part of a regular broad look at policy.

Russia has argued that the proposed system would threaten its own national security and was further evidence -- along with the eastward expansion of the NATO alliance -- of Western military influence encroaching near its borders.

The row over the shield has helped drive diplomatic ties between Moscow and Washington to their lowest level since the end of the Cold War.

But Russian officials have said they are encouraged by early signals from the Obama administration and hopeful of a fresh start in their relations.

(Additional reporting by David Brunnstrom in Brussels; Writing by Christian Lowe; Editing by Ralph Boulton)

The financial crisis is threatening to destabilise Russia amid unprecedented calls for the resignation of Vladimir Putin and his government.

The prime minister, who is accustomed to adulation, is facing one of the sternest challenges of his political career as an economic slow down triggers growing public discontent.

The normally supportive Communist Party has called for country wide protests on Saturday, threatening to harness "a wave of popular rage".

Officials said they expected at least 600,000 people to take part in demonstrations held across dozens of cities. Among calls for improved living standards, the protests will also demand the resignation of Mr Putin and his cabinet.

According to opinion polls, Mr Putin remains popular, enjoying an approval rating of 83 per cent. Even now, with the economy under strain, there is no sign of a challenger, who could usurp his place in the heart of most Russians.

Yet the Kremlin is planning a hardline response with several of the demonstrations being banned outright and the law has been changed to remove the right of protest organisers to trial by jury.

Seeking to show his affection among the people remained undimmed, Mr Putin's ruling party is forcing factory workers in to holding public rallies of loyalty this week that will proclaim the prime minister's wisdom and munificence.

Commentators say the administration's unease is understandable. Mr Putin has built his reputation on rebuilding Russia's economy – shattered in the decade following the collapse of communism – and pursing an aggressive policy that returned the country to international prominence.

Now, however, the economy is starting to stumble – a fact that could undermine the prime minister's ambition to carve a global role for Russia.

Government figures show the Russian economy shrank 0.7 per cent in December, the first year-on-year decline since the 1990s. One million people lost their jobs in the same month as falling oil prices undermined Russia's energy driven economy.

The Kremlin's unease has been deepened by the spectacle of mass protests on Russia's periphery and beyond. Police have broken up violent anti government protests in Latvia and Lithuania, whilst smaller demonstrations have erupted in Bulgaria, the Czech Republic and Hungary, all of which are struggling to deal with the financial crisis.

Protests in Iceland forced the government to call early elections last week. In Russia itself, a country where most are too afraid to protest even if they wanted to, a small but growing number is willing to take to the streets.

Analysts say they do not expect these weekends' protests to be large enough to threaten the government but warn that they could mark the beginning of a dangerous trend.

"The number of unhappy people is still manageable but is on the rise," said Nikolai Petrov, of the Moscow Carnegie Centre. "There is especial danger in cities and towns where local industry has collapsed."

Last month, the Kremlin was jolted from its complacency when thousands took to the streets of Vladivostok, Russia's third city. They marched to protest Mr Putin's decision to raise tariffs on imported cars by up to 80 per cent, a move that could prove economically devastating in the Russian Far East and is expected to cost 100,000 jobs.

Alarming for the Kremlin, the demonstrations took on a political hue with protesters demanding the entire government's resignation. To deep embarrassment in Moscow, placards urged Japan – where most of Russia's imported cars come from – to colonise Vladivostok. With second hand foreign cars popular among middle class Russians the protests spread.

In St Petersburg, one placard called on Mr Putin to " switch to a trolley" – a reference to the fact that the prime minister is ferried around in an imported Mercedes. Such direct criticism is virtually unheard of.

More disturbingly, the Vladivostok police defied orders to quell the demonstrations. Even ruling party officials in the region publicly stated their support for the protest. Moscow was forced to send Special Forces from the capital to end the peaceful protests violently. Dozens of demonstrators injured and up to 200 arrested.

The rebellion by state officials is unprecedented in the Putin era and raises doubts over how strong loyalty to the prime minister really is in Russia's far slung regions.

That danger has been compounded by the fact that the communist party, normally loyal to the Kremlin, is spear heading this weekend's protest and defying orders banning the marches. Facing growing discontent the Kremlin has resorted to a familiar scapegoat: the West.

Geopolitical Diary: A New Phase in U.S.-Russian Relations?January 29, 2009 | 0051 GMTRussia has suspended its plans to deploy Iskander short-range ballistic missiles to its Kaliningrad enclave because the new U.S. administration is “not rushing through” with plans to establish a missile shield in central Europe, Interfax reported Wednesday, citing an unnamed Russian military official. The same day, Russian Prime Minister Vladimir Putin delivered a speech at the World Economic Forum in Davos that, though it carried many well-worn anti-Western themes, ended with Putin wishing the new U.S. administration well — a shift from his scathing words for Barack Obama before the inauguration.

These two statements appear to signal a momentary easing of tensions between Moscow and Washington. More importantly, they show that Russia is trying to feel out the contours of the Obama administration’s foreign policy.

Russian President Dmitri Medvedev had announced the plans to deploy missiles to Kaliningrad — a tiny Russian enclave sandwiched between Poland and the Baltic states — on Nov. 5, the day after Obama’s election. The timing of that announcement (which was intentionally delayed to coincide with the election) was a pointed signal that Moscow would not pull any punches with the incoming administration. There has been some question over the status of Iskander missile production and deployment, and it is still not clear whether a unit even exists that is trained, equipped and prepared to deploy to Kaliningrad — but the announcement itself marked a deliberate escalation of tensions between Russia and the United States.

Those tensions had already been growing for several years. When Putin took power as president in 1999, his goal was to restore Russia to some semblance of its former prominence as a global power, after the free-fall of the 1990s. A major component of his plan involved keeping the United States out of Russia’s way – and especially out of the former Soviet region, which Moscow still considered its own proper sphere of influence. Thus, when George W. Bush took office in 2001, Putin attempted to form a close bond with his administration in order to win support and recognition of that sphere of influence. For example, Putin was the first world leader to call Bush following the 9/11 attacks, and Moscow offered to (and did) assist Washington in the ensuing war in Afghanistan.

But whatever amity there may have been did not last long. While Russia continued to claw its way back from its post-Soviet nadir, the United States pushed back in 2004 by supporting the Orange Revolution in Ukraine and the eastward expansion of the NATO alliance. From Russia’s perspective, these actions were a betrayal. By the time Putin and Bush had entered their second terms, it was clear that a geopolitical standoff reminiscent of the Cold War had begun to form. Last year, frictions went beyond mere rhetoric, with Russia’s war against U.S.-allied Georgia and Washington’s signing of missile defense deals with Poland and the Czech Republic.

Now different men hold the two presidencies — Medvedev took the helm in Moscow in 2008 and Obama was inaugurated just over a week ago — but the question remains whether anything fundamental has changed. Russian leaders may have not liked what Bush did, but they at least felt they understood him. Obama, only a few days into his administration, remains an unknown quantity from Moscow’s point of view.

In Russia, the change of administration did not mean a change in policy — effectively, the Putin regime remains in place. By the same token, Moscow did not take Obama’s campaign pledge of “change” seriously, and leaders there have not expected any kind of rapprochement to follow his inauguration. Indeed, Putin made it quite clear in the days before Obama’s inauguration that the United States has a lot of work to do if it wants to regain Russia’s trust any time soon — or ever.

But the Kremlin is now beginning to rethink its position. The government in Moscow does not trust Obama, but it does recognize that Obama needs the Russians. He has pledged to expand the war in Afghanistan — but with NATO supply routes in Pakistan under serious threaten, Washington needs another route into that theater – and the most readily available routes pass either through Russia proper or through former Soviet territories.

And so U.S.-Russian relations are at a pivotal point. Russia is trying to figure out the new American administration, to see whether it is willing to make concessions in exchange for help on the Afghan issue. On that front, Washington is sending mixed signals. Obama has stated that he wants to rethink missile defense in Europe — a key condition for any deal with Russia — and has said in general terms that he wants to redefine NATO, certainly an interesting possibility from Moscow’s perspective. Secretary of State Hillary Clinton has said, however, that the redefinition of NATO would involve clearing up arms-reduction treaties with Russia and that the United States would focus on achieving energy security for Europe (meaning helping the Europeans find alternatives to Russian supplies). Both moves potentially threaten some of Russia’s greatest means of leverage.

In this context, the announcement that Russia is putting off the Kaliningrad missile deployment could mean one of two things.

First, it could be a tentative gesture designed to sound out the new administration. The early days of the Obama presidency are an opportunity for Russia to find out how serious Obama and his team really are. The U.S. push to establish new supply routes to Afghanistan is proceeding too quickly for Russia to wait — so Moscow could be floating a trial balloon and watching for the response, while actively attempting to shape the new administration’s behavior. In “pulling back” its deployment plans for the Iskander, Russia could be creating an opening for the United States to respond in kind. However, Moscow has chosen its opening gambit carefully: If there is no reciprocation, the deployment can move ahead – and the missiles would directly threaten U.S. ballistic missile defense installations in Poland once they are built.

The other possible explanation for Russia’s announcement could be that the United States already has made an offer behind the scenes. Talks occurred on the sidelines of the informal Jan. 26-27 Russia-NATO Council meeting in Brussels. This was an ambassador-level meeting, though Russian envoy Dmitri Rogozin did hint at a possible arrangement in the works. On the first day of the talks, Rogozin blasted Washington for wanting to use former Soviet territory for shipments to Afghanistan, but he changed his tune on the second day, saying there was a possibility the United States and Russia could strike a deal. This could indicate that a preliminary deal has, in fact, already been struck. If so, the Kaliningrad discussion and Putin’s comments, both of which came soon after, could have been a gesture to show Moscow’s genuine interest in negotiating.

This does not mean Russia could not change its mind once again on Kaliningrad. Provided that the missiles are built and there is a crew in place that can operate them, it is simply a question of deployment. Russia will not commit itself to any concessions recklessly, but it appears the Russians are opening a door for Washington to prove that change, indeed, has come.

1 of 2 The global economic meltdown dominated the agenda on the opening day of the annual meeting of powerbrokers and opinion formers, with Putin telling delegates that the crisis constituted a "perfect storm."

While economists and analysts could -- and should -- have predicted the crisis, Putin said, instead it had "come unexpectedly, just as winter comes unexpectedly to Russia every year."

"Just a year ago, American delegates speaking from this rostrum emphasized the U.S. economy's fundamental stability and its cloudless prospects. Today, investment banks, the pride of Wall Street, have virtually ceased to exist," Putin commented.

But he said Russia wished U.S. President Barack Obama's new administration success in tackling the country's economic problems and said Moscow was ready to join international efforts to address the crisis.

"We expect all our partners in Europe, Asia and America, including the new U.S. administration, to show interest in further constructive cooperation in dealing with all these issues," Putin said.

He said it was time to "do away with virtual money" and establish an "economy of real values" grounded in a "just and efficient global economic architecture."

Earlier, Chinese Premier Wen called for greater cooperation between developed and developing nations in tackling the global financial crisis and building a new world economic order.

He also warned that further action was needed internationally to "restore market confidence" and protect world economic growth.

"Political leaders must be forward-looking," Wen told delegates. "They should be responsible to the entire international community as well as to their own countries and people."

Wen admitted that the economic crisis had severely affected China's businesses, notably because of falling demand for Chinese exports. But he said the fundamentals of China's economy remained in "good shape," predicting 8 percent growth in 2009, following 9 percent growth in the previous 12 months.

He called for a raft of measures to be implemented to address the root causes of the crisis and create a "new international financial order."

They included the reform of supra-national financial institutions to grant more power to developing nations and the establishment of a multilateral trading regime.

"In tackling the crisis, practical cooperation is the effective way," Wen said. "The financial crisis is a test of the readiness of the international community to enhance cooperation and a test of our wisdom."

Earlier, several dozen pro-Tibetan demonstrators gathered peacefully in Davos about a kilometer from the conference venue to protest over Wen's presence at the annual meeting of powerbrokers and opinion formers.

Russia moved swiftly today to extend a hand to President Obama over American plans for big cuts in nuclear weapons.

Sergei Ivanov, the Deputy Prime Minister, said that Russia was ready to sign a new strategic missile treaty with the United States after The Times disclosed that Mr Obama is to seek an 80 per cent reduction in stockpiles.

"We welcome the statements from the new Obama Administration that they are ready to enter into talks and complete within a year, in this very confined timeframe, the signing of a new Russian-US treaty on the limitation of strategic attack weapons," said Mr Ivanov, a hawkish former defence minister once seen as a candidate to become president of Russia.

He added: "We are also ready for this, undoubtedly."

The landmark Strategic Arms Reduction Treaty (Start) signed by the US and the Soviet Union in 1991 is due to expire in December. It reduced stockpiles held by the two states from 10,000 to 5,000 but there has been little progress in negotiating a successor treaty.

Talks faltered in part over President George W. Bush's enthusiasm for siting a missile-defence shield in eastern Europe, a move that infuriated Russia. Mr Obama has not said whether he will press ahead with the plan to put ten interceptor missiles in Poland and a radar station in the Czech Republic.

A delay in the programme could ease Russian concerns and pave the way for talks to cut the number of nuclear warheads to 1,000 each. An official in the US Administration told The Times: “We are prepared to engage in a broader dialogue with the Russians over issues of concern to them.”

The significance of missile defence as an obstacle to successful negotiations was underlined by a former chief of staff for the Russian Strategic Rocket Forces. Colonel-General Viktor Yesin said that a deal on missile cuts made sense only if Washington accepted Moscow's security concerns.

"If the American Administration really intends to radically cut Russia's and the US's strategic nuclear arsenals to 1,000 warheads, this would undeniably be a step that could promote real nuclear disarmament," he told Interfax news.

"However, with such considerable reductions of nuclear arsenals, an equal level of security for Russia and the US could be ensured only on condition that Washington drops the idea of deploying . . . its missile defence system in Europe."

Andrei Piontkovsky, executive director of the Strategic Studies Centre in Moscow, said that defence experts in Russia understood that the US missile shield posed no military threat, but Vladimir Putin, the Prime Minister and former president, was determined to prove that the West could not decide anything in Eastern Europe without Moscow's approval.

"The Start treaty for Russia is a symbol that it is still a superpower, so I think the Kremlin would be satisfied with the fact that Obama is not pushing this issue [missile defence] ahead," Mr Piontkovsky said.

Pavel Felgengauer, one of Russia's leading defence analysts, told The Times that Mr Obama would face domestic pressure to accelerate the missile-defence programme after Iran's success in launching a satellite into space yesterday.

"This puts a serious shadow over the arms-control negotiations because it was assumed that the Democrats would freeze or postpone deployment of this project until the missile threat emerged. Now it has," he said.

"The pressure is going to be on the new US Administration to continue deployment and maybe even speed it up. With missile defence in Europe getting this new impulse from Tehran, that makes it even more difficult to achieve results with Russia."

Geopolitical Diary: Prague Stalls on Lisbon TreatyFebruary 4, 2009After a long and arduous debate, the lower house of the Czech parliament voted Tuesday on the Lisbon Treaty, a key document meant to streamline decision making in the European Union and serve as its proto-constitution.

Or at least that was the plan.

Instead, Prague has delayed the debate and the subsequent vote yet again, this time until Feb. 15. The official reason is that the relevant parliamentary committees have not yet examined the treaty — originally drafted in September 2007 — sufficiently to reach a unified stance. However, the real reason has nothing to do with Prague’s suspicion of the Lisbon Treaty, with the Czech Republic’s case of euroskepticism or even with the European Union. At issue is the geopolitical choice that Prague feels pressured to make between a resurging Moscow on one side and, on the other, a new American administration that is undecided on its level of commitment to ballistic missile defense (BMD) installations in Europe.

In short, Prague is struggling to decide to whom it will turn for protection and with whom it needs agreements in order to avoid becoming collateral damage in a Moscow-Washington fight — something with which all of its Central European neighbors can certainly empathize.

The Czechs currently hold the rotating EU presidency. This fact has been something of a running embarrassment for the bloc, since the Czech Republic is the one country (apart from the notoriously euroskeptical Ireland) that has stalled on ratifying the core treaty that is supposed to make the EU more efficient. However, Prague’s skepticism toward the Lisbon Treaty and the general idea of greater European political unity is long held. Fundamentally, the Czech Republic’s fear is that under the new treaty, its own foreign policy agenda would be subject to Brussels’ approval — particularly since Lisbon sets out provisions for streamlining and centralizing decision-making on EU foreign policy (such as the creation of a High Representative for Foreign Affairs and of a “president of the European Union,” a position that would be held by a person rather than a country and would serve for two and a half years).

For a country that historically has been stuck between competing land powers in Europe (Germany, Austria, Poland and the Soviet Union/Russia), giving away control over foreign policy is tantamount to surrendering its only means of expressing a modicum of independence. The Czechs are hardly alone in this way of thinking. The Poles, Balts and Hungarians, for example, are all newer to the EU, and would be on the front line in any potential conflict with Russia. They want to retain the ability to bargain on their own terms, not become bargaining chips for Paris and Berlin to trade with Moscow.

To compensate, all of these states — but most notably Poland and the Czech Republic — have been looking not to Western Europe for security, but to the United States. These two countries have struck preliminary deals to host BMD sites (Poland would host the missile sites and the Czech Republic would house the radar installations). It is not so much that these sites would provide any direct defense against Russia — in fact, Prague even offered to include the Russians in the project — but that they would be manned by Americans, that is important. Having U.S. boots on Czech and Polish soil — even if just a few hundred technicians and support security staff — would ward off the Russians like garlic would vampires. Or so Warsaw and Prague hope.

However, the election of U.S. President Barack Obama has changed the calculus for Warsaw and Prague. Obama thus far has been noncommittal on whether the United States will continue its BMD plan in Central Europe, and this has rattled Prague and Warsaw to the core. For them, the perception of U.S. dithering — no matter the stated reason — signals possible abandonment in order to prevent a larger U.S. clash with Russia.

Prague is therefore delaying its vote on the Lisbon Treaty again, holding off a decision until it gets firmer security commitments from Washington. If the United States does abandon the Czech Republic, Prague’s choices would be to try to reshape the Lisbon Treaty in order to form a better set of protective measures — which would be highly difficult if not impossible — or to turn toward the Kremlin to strike a deal.

Either way, Central Europeans will be looking for assurances that they would not become stepping-stones in a Russian path to Western Europe once again.

It appears that quite a few pieces in the U.S.-Russian game moved this past weekend and Monday at the Munich Security Conference. Though the public negotiations between U.S. Vice President Joe Biden and Russian Deputy Prime Minister Sergei Ivanov were tense, both men left the meeting talking favorably about the U.S.-Russian relationship. But there was another American powerhouse in Munich, and not by coincidence.

Former U.S. Secretary of State Henry Kissinger was at the conference to accept an award for his past role on the international stage — yet Kissinger’s principal role on that stage appears to be ongoing. U.S. President Barack Obama’s administration virtually subcontracted Kissinger to deal with the Russians well before Obama’s inauguration took place. Kissinger has a long and sordid history with the Russians. He is a Cold War veteran who understands what Russia wants and what it is willing to trade to get it — an essential skill for any successful negotiations, and something the Russians respect.

Kissinger quietly visited Moscow on behalf of Obama in December, meeting casually with Russian President Dmitri Medvedev and secretly with the real dealmaker, Russian Prime Minister Vladimir Putin. Now he has returned to the negotiating table in Munich. But Kissinger has never been recognized formally as part of Obama’s plan. This is because Kissinger isn’t formally part of the U.S. government, and as a Republican from the Nixon administration he is despised by many within Obama’s party.

But these are hardly the only meetings that affect the Russians. Biden met with the Russians in Munich to discuss the first Strategic Arms Reduction Treaty (START I). U.S. Central Command chief Gen. David Petraeus toured the Central Asian states to broker a deal on new routes to Afghanistan without taking into account the larger deal on the table with Russia. And U.S. Secretary of State Hillary Clinton is being as active as one would expect the secretary of state to be. Not only are members of Obama’s public team taking on different issues, but none of the talks seem to fit together into a holistic plan. Put another way, Moscow feels it is receiving schizophrenic signals from such a scattered approach.

If anything, such an approach is undermining the Kissinger effort, which is attempting to forge some sort of grand bargain that includes the Conventional Forces in Europe Treaty, the soon-to-expire START, NATO expansion to Ukraine and Georgia, U.S. ballistic missile defense (BMD) installations slated for Poland and Czech Republic, Russia’s push for preeminence in Central Asia and routes for NATO supplies through former Soviet turf to Afghanistan.

Thus far in the talks, Kissinger has not budged on any major items of friction. This is certainly something that has gotten the Russians’ attention; they were pretty sure they held the upper hand. In fact, Kissinger has explicitly noted that the United States had no intention of trading an Afghanistan supply route for recognition — in public or private — of a Russian sphere of influence.

The Russian leadership is well aware that it is operating on borrowed time. The Russian demographic picture is nothing short of horrid, but there is a bit of a respite as Russians born during the 1980s Soviet baby boom are now having their own kids. This is slightly delaying the enervating impact of a population that is simultaneously dwindling and aging. But after the next three to five years, all trends are down. This is not to say Russia as a state will die in the next few years, but instead that it needs to push back Western influence as far as possible before Russia’s (probably terminal) decline begins. So it looks as if the Russians are pulling back from demanding a deal on the entire picture and working from the short list of items which are most critical because these are the items that change the strategic picture in ways that most worry the Russians.

That list consists of NATO expansion, BMD and START. The NATO item is fairly self-explanatory: every country that joins NATO is one less that can be a buffer between NATO and Russia. But BMD is a more complex issue. Russia’s real concern with BMD in Poland is not the BMD systems, but U.S. boots on the ground in a former Warsaw Pact buffer state. It is uncomfortably close for Moscow. While Russia is certainly uncomfortable with the long-term trajectory and implications of a renewed American focus on BMD, in this case, Russia is using BMD mostly to publicly attack developments on the world stage, harkening back to the Anti-Ballistic Missile Treaty.

But the granddaddy of them all is START. Renewing the treaty would keep the Russians and the Americans at precisely the same level of strategic nuclear arms. This is far more than simply ego. START allows Russia to demand American attention at any time on any strategic issue — that’s what happens when the other guy has as many nukes as you do.

U.S. policy for the past decade has been that START does not need to be renewed (it expires in December) because the Russians cannot afford the price in dollars or skilled manpower to maintain their deterrent. Why bother negotiating a treaty that will limit American policy options when there is no need to give concessions to the Russians? From the Russian point of view, a continuation of START limits the Americans and keeps the Russians in the game. But an end to START forces the Russians to compete on everything, and there are not a lot of fields in which the Russians can consistently succeed against the combined West.

And so the willingness of Kissinger, Biden and Clinton all to put START on the negotiating table is a gesture that the Russians could not fail to notice. In fact, negotiations seem to already be affected. Russia gave a little on the U.S. plans for a Central Asia route to Afghanistan: On Feb 9, Kazakhstan — which hardly even breathes these days without checking with the Kremlin — announced that it will allow American military shipments to Afghanistan. Just a small glimpse of what it might look like to work with the Russians.

So what? America is on a roll in Eurasia. Democracy, open markets and stability spread across the region in the Clinton and Bush eras. From Estonia to Georgia to Macedonia, free people want to join the West.

At every step of the way, Russia sought to undermine this great post-Cold War project. Grant that the Kremlin acts in defense of its perceived interests but so should the U.S., and continue down this same path.

Here Foggy Bottom's finest chime in: Yes, but imagine a world with a friendly Russia, able to help us, say, stop Iran's atomic bomb program. So let's not push so hard to deploy anti-Iran missile defense sites in Poland and the Czech Republic that Russia hates -- use, if necessary, the excuse that costs and feasibility require further study. Back off on closer NATO ties for Ukraine and Georgia. Make Russia feel important and consulted. Joe Biden sketched out this sort of bargain at last weekend's Munich security conference.

The conceit is we can win the Kremlin over by modifying our behavior. Before Mr. Obama tries, he should be aware of recent history. On missile defense, American diplomats spent as much time negotiating with Russia as with the Central Europeans, offering Moscow the chance to join in. Nothing came of it. On Kosovo independence and Iran sanctions, Russia blocked the West at the U.N.

Last spring, NATO snubbed Georgia and Ukraine in a signal of good will to Mr. Putin. The day after, Mr. Putin privately told Mr. Bush that Ukraine wasn't "a real country" and belonged in the Russian fold. Five months later, Russia invaded Georgia and de facto annexed its breakaway provinces of Abkhazia and South Ossetia.

Mr. Obama may be tempted to think Russia can be won over. After all, they would seem to need America (short for the West) far more than America needs Russia. We're not the enemy. Russia's real strategic challenges are in the East: China looks ravenously at the vast, mineral-rich, lightly populated Siberian steppe cut off from Moscow (to this day, you can't drive across Russia). And to the South: The arc of Islamic extremism, starting with a possibly nuclear Iran, a competitor for Caspian energy and influence.

And as Mr. Putin discovers each day his economy sinks further, Russia failed to take advantage of sky-high oil prices to diversify away from energy. It sells nothing of value to the world aside from gas, oil and second-rate weapons. Its infrastructure is decaying and its population in decline.

A Kremlin leader with a long-term view would see these grave threats to Russia's future and rush to build a close partnership with the West. But the interests of Mr. Putin and his small, thuggish, authoritarian clique don't necessarily coincide with that of Russia.

The Obama magic dust doesn't seem to work on a regime defined and legitimized by its deep dislike for America. Dmitry Medvedev, the Putin underling in the president's office, moved the state of the nation address to the day after the American election to spin the outcome for the domestic audience. The U.S., he said into the winds of pro-American sentiment sweeping across the world in the wake of the Obama win, was "selfish . . . mistaken, egotistical and sometime simply dangerous."

The Kremlin then welcomed Mr. Obama into the White House with the administration's first serious foreign policy headache. Taking $2 billion from its fast-depleting reserves, Russia bullied and bribed Kyrgyzstan to close a U.S. military airfield, the main transport hub for supplies going into Afghanistan. Russia's desire for a "sphere of influence" trumps the threat of resurgent extreme Islamism in its southern underbelly.

The thinking here is Cold War porridge. But the Russians were never offered a new narrative. Mikhail Gorbachev's idea of a "European family" and Yeltsin's reforms foundered. Mr. Putin went back to a familiar recipe: Russia, empire-builder and scourge of the West.

A Cold War mentality lingers in America, too. A foreign policy caste rich in Sovietologists by habit overstates Russia's importance. The embassy in Moscow is huge; bilateral meetings inevitably become "summits," like in the old days.

Mr. Obama's fresh start is a good time for a reality check. The U.S. can work with Russia, seen in its proper place. To even suggest that the Russians have a special say over the fate of a Ukraine or our alliance with the Czechs lets Mr. Putin nurture the illusion of supposed greatness, and helps him hang on to power.

Ultimately it's up to the Russians to decide to be friends. One day, someone in the Kremlin will have to confront a hard choice: Does an isolated and dysfunctional Russia want to modernize and join up with the West, look toward China, or continue its slow decline? Until then, Mr. Obama better stock up on aspirin and dampen his and our expectations about Russia.

Mr. Kaminski is a member of the Journal's editorial board.===========================================

I am sympathetic emotionally with this piece, but practical questions remain concerning supply routes to Afg, Russian enabling of Iranian nukes, the vulnerability of Georgia, etc. Arguably Bush left us overextended, especially with regard to Russia. What does our world strategy look like if Russia decides were are putting them in a corner and that they must be as difficult and disruptive as possible? They may "deserve" it, but are we able to back it up?

Also, any chance that there is any merit to some of the Russian thinking? E.g. were we right to back Bosnia's breakaway? What happened to early Clinton promises that NATO would not expand east?

TORONTO (AP) -- Canada's defense minister said fighter jets were scrambled to intercept a Russian bomber in the Arctic on the eve of President Barack Obama's visit to Ottawa last week.

Peter MacKay said Friday that the bomber never made it into Canadian airspace. But he said two Canadian CF-18 jets met the bomber in international airspace and sent a ''strong signal that they should back off.''

''They met a Russian aircraft that was approaching Canadian airspace, and as they have done in previous occasions they sent very clear signals that are understood, that the aircraft was to turnaround, turn tail, and head back to their airspace, which it did,'' MacKay said.

''I'm not going to stand here and accuse the Russians of having deliberately done this during the presidential visit, but it was a strong coincidence,'' he said of the Feb. 18 incident.

Obama arrived in Canada the next day.

MacKay said it happened when Canada's security focus would be on Ottawa, but he said resources weren't stretched.

Attempts to reach the Russian Embassy in Ottawa or officials in Moscow were not immediately successful.

Soviet aircraft regularly flew near North American airspace during the Cold War but stopped after the collapse of the Soviet Union. Several years ago, Russian jets resumed these types of flights.

MacKay said the Russians give no warning prior to the flights. Canadian government officials, including MacKay, have asked the Russian ambassador and defense minister to give Ottawa notice of such flights. The requests have fallen on deaf ears.

''They simply show up on a radar screen,'' MacKay said. ''This is not a game at all.

OTTAWA -- Canada will not tolerate Russian intrusions into Canadian airspace, Prime Minister Stephen Harper said Friday after it was disclosed that two Russian bombers were intercepted just outside the Canadian Arctic shortly before U.S. President Barack Obama's visit to Ottawa this month."I have expressed at various times the deep concern our government has with increasingly aggressive Russian actions around the globe and Russian intrusions into our airspace," the prime minister said at a news conference in Saskatoon."This government has responded every time the Russians have done that. We will continue to respond; we will defend our airspace."Earlier Friday, Defence Minister Peter MacKay disclosed that two CF-18 fighter jets met at least one Russian bomber within 24 hours of the U.S. president's trip to Ottawa on Feb. 19 just outside of Canada's Arctic airspace.The incident set off a round of bitter sniping between Moscow and Ottawa that was a throwback to the Cold War era.

Initially there was confusion over the number of Russian planes involved -- it turned out to be two, not one -- while Russian sources mocked Canada's assertion that they were given no notice of the flights.

With Mr. Obama poised to leave U.S. soil for the first time as president on Feb. 19, the joint Canada-U.S. aerospace command, Norad, picked up the approaching aircraft.

Canadian jets were scrambled and sent "very clear signals" to the Russian aircraft to "turn tail and head back to its own airspace," which were followed without incident, Mr. MacKay said.

Later Friday, Canadian defence and Norad officials confirmed a second Russian plane was involved in the incident, and identified the two aircraft as Tupolev Tu-95 propeller driven bombers, a type of aircraft known as the "Bear."

Vladimir Drik, an aide to the Russian chief of staff, speaking to RIA Novosti news agency confirmed the Feb. 18 flight, but indicated a different model of Tupolev carried out the mission.

"The Tupolev-160 fulfilled all its air patrol tasks. It was a planned flight."He said the crew acted solely within the limits of international air agreements and did not violate Canadian airspace.

Typically Blackjacks are not seen until its too late and many are not seen at all:

A Russian nuclear stealth bomber was able to fly within 90 seconds of the British coast without being picked up by radar, it was revealed today.The supersonic ‘Blackjack’ jet flew completely undetected to within just 20 miles from Hull in one of the worst breaches of British security since the end of the Cold War.

RAF radar eventually picked up the plane, but the only two pairs of fighter jets used for air alerts were on other duties.

GENEVA—Secretary of State Hillary Clinton opened her first extended talks with Russian Foreign Minister Sergei Lavrov by giving him a present meant to symbolize the Obama administration’s vow to “press the reset button” on U.S.-Russia relations.

She handed a palm-sized box wrapped with a bow. Lavrov opened it and pulled out the gift: a red button on a black base with a Russian word peregruzka printed on top.

“We worked hard to get the right Russian word. Do you think we got it?” Clinton asked.

“You got it wrong,” Lavrov said.

Instead of "reset," Lavrov said the word on the box meant “overcharge.”

Clinton and Lavrov laughed.

“We won’t let you do that to us,” she said. Trying to recover, Clinton said the new administration was serious about improving relations with Moscow. “We mean it, and we’re looking forward to it.”

Lavrov said he would put the button on his desk and he and Clinton pushed the button together, before sitting down for their meeting.

A State Department official said the misspelling on the button was being corrected, in time for the post-meeting news conference.

Russia takes the Biden Challengeposted at 10:02 am on March 14, 2009 by Ed Morrissey

Joe Biden warned us that Barack Obama would get tested by unfriendly nations in the first six months of his administration because of his inexperience. That prediction now looks like sunny optimism. Just days after China aggressively challenged the US Navy in international waters in the South China Sea, Russia now says they may start basing bombers in Venezuela — and Cuba:

A Russian Air Force chief said Saturday that Venezuelan President Hugo Chavez has offered an island as a temporary base for strategic Russian bombers, the Interfax news agency reported.

The chief of staff of Russia’s long range aviation, Maj. Gen. Anatoly Zhikharev, also said Cuba could be used to base the aircraft, Interfax reported. …

Zhikharev said Chavez had offered “a whole island with an airdrome, which we can use as a temporary base for strategic bombers,” the agency reported. “If there is a corresponding political decision, then the use of the island … by the Russian Air Force is possible.”

Interfax reported he said earlier that Cuba has air bases with four or five runways long enough for the huge bombers and could be used to host the long-range planes.

It took John Kennedy more than a year to precipitate a military standoff with the Soviet Union over Cuba in the 1962 missile crisis. It’s taken the Obama Amateur Hour less than two months.

Recall that Barack Obama ran in part on a campaign to “restore diplomacy” in foreign relations. Hillary Clinton made a big show of bringing a “reset button” to her first meeting with her Russian counterpart Sergei Lavrov, in which the button was labeled incorrectly and not spelled in Cyrillic. This followed her bumbling show at the EU, making it clear to the Russians that our foreign service was in complete disarray, run by imcompetents.

Can you imagine Russia trying this with George Bush? For that matter, can you imagine Bush losing Kyrgyzstan — and a vital military route — to Putin? Russia is doing this now because Putin and Medvedev understand that they can get away with it.

The Kremlin later said that Zhikarev spoke “hypothetically”. We’ll see. I’d guess that it won’t take long for Moscow to start landing bombers 90 miles off our coast if the Obama administration continues the feckless performance we’ve seen thus far.

U.S. President Barack Obama capped a conference-filled tour of Europe on Sunday with a speech at the EU-U.S. summit in Prague, Czech Republic, where he discussed nuclear disarmament the unity of Europe and the United States within NATO.

More importantly, Obama finally made a statement that we had been expecting: The United States will stand firm on its commitment to deploy a ballistic missile defense (BMD) system in central Europe. This marks a shift from his position during the election campaign, when he said he would reconsider the Bush administration’s stance on the issue. Obama chose his words carefully in explaining his decision: He said that as long as a threat from Iran persists, the United States intends to move forward with its BMD plans — but should the Iran threat be eliminated, the driving force for missile defense construction in Europe would be removed. The key is that Obama recognizes there are other reasons for BMD. There was no need to elaborate on these reasons, since his speech came the same day that North Korea attempted to launch a satellite into space.

Considering that his speech was delivered in the Czech Republic — one of two countries that Obama praised for showing courage in their decisions to host aspects of the BMD system — it was clear that the main audience for his remarks was Russia.

The past week of meetings — particularly the sit-down between Obama and Russian President Dmitri Medvedev — clearly showed just how far each country could push the other. The Russians came into the week feeling confident that they could push Washington to back off its commitment to BMD in Europe. They also felt comfortable about success in achieving other goals, like getting the United States to bend on nuclear arms reduction treaties and NATO expansion to Ukraine and Georgia.

However, not only did the meeting between Obama and Medvedev not go as expected, but it now appears that Moscow’s worst nightmares are coming true.

Russia’s concerns about the BMD program are well known. Not only would the program give the United States a military presence in Poland – a former Warsaw Pact state — but it also would mean Washington would help to build up Poland’s own military forces. Russia then would have a new (and vehemently anti-Russian) military threat to contend with to its west; moreover, that force would stand between Russia and its more traditional European foe, Germany. But there are also deeper, longer-range Russian concerns about the implications of BMD.

This highly complicates the security situation on Russia’s European frontier and limits how far west Russia can expand its influence as part of its overall resurgence.

But the BMD announcement is just one part of the United States’ plan to counter that resurgence. During the week of summits in Europe, Washington also made sure that Russian leaders knew their former demands — particularly regarding NATO expansion to Ukraine and Georgia — had not been settled. A membership plan was not agreed for these states during the NATO summit on April 3 and 4, but the conference’s closing statement made it clear that the door was still wide open for their eventual inclusion in the alliance.

Many European heavyweights, like France and Germany, are opposed to pushing Russia further on the NATO expansion issue, but — as the Russians know well from the color revolutions in Ukraine and Georgia — the United States does not need its NATO allies to pursue and support Ukraine or Georgia independently. In essence, the United States has moved the sphere of play between Washington and Moscow from central Europe back into the former Soviet states.

Russia is not taking this shift lightly. Moscow had a long list of options to consider if the summits did not go well, and it is now beginning to make its moves. Moscow had an opportunity to remind Europe of its energy dependence on Russia, it took the next step in pushing the United States out of Central Asia, and set in motion a reversal in the Ukrainian government. Russia also is forming a plan to shake up the Georgian government this week.

Though these moves are significant and important, they are still confined to the former Soviet sphere. From the outside, it looks as if the Russians are about to run out of time to solidify their position on real Western turf and are assuming a more defensive posture to protect their hold over former Soviet territory. But both the Russians and the Americans know Moscow has the upper hand in this area, and it won’t take much to finish this part of the game.

The next issue to watch, then, is Turkey. It is part of the United States’ plans to counter Russia, and Obama has begun a two-day visit to this NATO state. At the same time, Ankara could be working out a deal with Armenia — a state that is allied with Russia — in a move that could tip the balance of power in the Caucasus. Moscow needs to watch and counter the larger threat coming from the U.S. moves here, on Russia’s southern flank. Since Moscow has leverage of its own with Turkey, Ankara is a wild card.

In this particular case and it's an important one, standing up to the Russians over deploying missile defense and partnering with former Soviet republics that are among the most pro-American places in the world, it would appear that Obama is doing the right things for the right reasons.

(In the case of failing to get help in Afghanistan, Obama is learning that unilateralism is a case of having allies we can't count on, which is an American problem, not a Republican one.)

I don't recall a sitting president continue to stoop so low as to endlessly blame the previous administration on so many problems.And to go over seas and make public appearances while humiliating the previous pres.!

It is really disgraceful.

Reagan could have done the same to Carter but he had class and stood up for his country and not criticized it to the world.

SAUL LOEB/AFP/Getty ImagesRussian President Dmitri Medvedev (L) and U.S. President Barack Obama in London on April 1SummaryAhead of U.S. President Barack Obama’s trip to Russia, STRATFOR has received unconfirmed information indicating that Washington could be willing to yield to Moscow on the issue of ballistic missile defense in Eastern Europe if Moscow gives Washington assurances on issues related to Afghanistan and Iran. It could be that the United States is willing to make a deal with Russia in the short term, but overall Washington has made it clear that Afghanistan and Iran take priority over Eastern Europe.

Analysis

In the lead-up to U.S. President Barack Obama’s July 6-8 visit to Russia, a flurry of public negotiations is taking place. However, one of the tougher subjects being negotiated more privately is Russia’s demand that the United States abandon its plans to place ballistic missile defense (BMD) installations in Poland and the Czech Republic. STRATFOR has received unconfirmed information on what the United States may be considering conceding to the Russians in order to gain assurances on other critical issues — like Iran and Afghanistan — from Moscow.

In the negotiations between Moscow and Washington, there are myriad issues on the table — some of which Russia feels confident in handling, like NATO expansion to Georgia and Ukraine or renegotiating START. Then there are other issues that Russia considers more difficult, like the BMD plans. For Russia, this issue is about more than BMD; it is about an actual U.S. military presence on the former Soviet border. When Obama and Russian President Dmitri Medvedev met in April, Russia was prepared to push its demand to keep BMD installations out of Poland, but the United States held firm on the issue.

However, since April, Washington has become more concerned with its war in Afghanistan, the destabilization of neighboring Pakistan, and more recently the post-election situation in Iran. Enmity between Washington and Moscow could make all of these situations more difficult. The United States knows Russia has some very old but powerful ties to Afghanistan and its Islamist groups. There is little proof yet that Russia has been meddling in Afghanistan, but there is potential. With Pakistan entrenched in chaos, the United States is still interested in using supplementary logistical routes for military supplies bound for Afghanistan, and the only real alternative to Pakistan is Russia’s turf in Central Asia — and even Russia itself — though Russia has frozen all talks on the use of such routes.

And then there is Iran. Russia has given Iran rhetorical backing in recent years. Russia also helped to build Iran’s Bushehr nuclear plant and continually threatened the West with further military deals with Tehran (though it has consistently abstained from selling Iran strategic air defense systems). But Obama seems committed to negotiating with Iran, even though its anti-U.S. president, Mahmoud Ahmadinejad most likely will serve a second term, and Washington does not need Russia to interfere or escalate tensions.

For quite some time, STRATFOR has noted that with U.S. foreign policy focused on fighting the Afghan war and on negotiations with Iran, the question regarding Russia’s resurgence has not been whether the United States will make concessions to the Russians, but how much and how publicly.

STRATFOR sources in Moscow have said that the latest offer from the Americans reportedly entails abandoning the Polish/Czech Republic arrangement and instead incorporating existing Russian radars into the existing U.S. BMD architecture. This proposal has advantages and disadvantages both technically and geopolitically.

From a technical perspective, the matter is problematic. U.S. ballistic missile defenses rely upon X-band radar for tracking and plotting intercepts. Russia’s Gabala early warning radar in Azerbaijan — one of the radar systems being considered for U.S. use — is of the older Pechora type, and operates at a different frequency than the X-band. While the Gabala radar would certainly be useful for early warning and monitoring Iranian missile tests, it is also oriented toward the Indian Ocean, so that an Iranian ballistic missile launched at Western Europe or the continental United States would quickly pass out of its field of view. The territory of Azerbaijan would also be too close to Iran for basing ground-based midcourse defense interceptors.

A newer, next-generation Voronezh-DM type radar at Armavir in the Russian Caucasus was activated and put on alert in February. The newer radar is thought to have more direct applicability to U.S. BMD efforts, but is still fixed in orientation — in this case toward Africa — so that while Iran and Western Europe both fall within its coverage, an Iranian missile launch directed at the United States would likely be on the periphery of the radar’s field of vision. More study would likely be necessary to determine its precise utility and how exactly it would fit into an overall scheme. But from a technical perspective, it could likely only serve as a complement to — not a replacement for — the fixed X-band radar slated for the Czech Republic.

That said, there are alternatives to placing an X-band radar in the Czech Republic. The United States also has a mobile deployable X-band radar (though the one currently in place in Israel reportedly experienced some technical issues during emplacement), and BMD-capable Aegis-equipped warships could be parked in the Black and Mediterranean seas as well as the North Sea east of the United Kingdom.

There also remains the issue of basing for interceptors. The ground-based midcourse defense interceptors slated for Poland require fixed concrete silos. Poland is about as good a spot as any, though an alternative site could be considered. In addition, it has been suggested that an Iranian missile caught with sufficient warning and with proper tracking data could be engaged by an interceptor based in Alaska.

Ultimately, from a purely technical standpoint, doing a deal with the Russians that sacrifices the Poland and Czech Republic sites in exchange for some access to Russian radar data does not seem particularly compelling. But the United States’ issues with Russia are much larger and more complex than BMD meant to defend against Iran. Washington could still decide that using alternative methods to guard against Iranian ballistic missiles is sufficient, and a larger deal with Moscow is worth the sacrifice.

There is also the possibility that the United States is striking a deal with Russia in the short term in order to get its house in order over Afghanistan and Iran, while in the longer term keeping its door open with Poland and the Czech Republic (though as BMD technology continues to mature, Washington will field increasingly flexible and mobile systems; the need for a fixed installation is fleeting). But such a scheme would be tricky since Moscow does not entirely trust Washington, and Warsaw will most likely not be pleased that the United States has abandoned it, even temporarily, in order to appease the Russians.

But from a geopolitical viewpoint, the United States has made it clear that its priorities are Afghanistan and Iran at the moment, not Russia or its resurgence. Conceding on Poland would not only create a more amiable Russia that could help with Afghanistan and Iran, it would also prevent the Afghan and Iranian situations from getting more difficult for the United States.

This plan seems reasonable geopolitically, but many within the administration are not on board, as they know the ramifications of a deal with Moscow. Such a deal could lose the faith of those NATO allies that depend on the United States to protect them from a resurgent Russia (not just Poland, but many former Soviet states that continue to feel pressure from Moscow). It would also mean effectively surrendering ground to Russia that — even when the United States has more room to maneuver — could be difficult to win back. Both of these consequences are something Moscow wants, so the Kremlin is closely examining the latest offer regarding BMD. Russia is concerned that Washington could rescind the offer because of the plan’s technical shortcomings and because the implications for the perception of America’s commitment to its NATO allies are very apparent to some within the administration.

Russia Holds Largest War Games Since War With Georgia _ In Signal To Georgia, And To US

Thousands of troops, backed by hundreds of tanks, artillery and other heavy weaponry, began rumbling through the North Caucasus on Monday, as Russia began its largest military exercises since last year's war with Georgia.

The Caucasus 2009 war games are being seen by many experts as a warning shot for nearby Georgia, where the government says it has rearmed armed forces and where NATO recently wrapped up its own exercises.

Experts say the exercises may also be signal to the United States that Russia will give no ground on its efforts to maintain an exclusive sphere of influence in Georgia and other former Soviet republics. The games run through July 6 _ the day that President Barack Obama arrives in Moscow for a highly anticipated summit with Russia's Dmitry Medvedev.

Defense Ministry official say more than 8,500 troops will take part, along with nearly 200 tanks, armored vehicles, 100 artillery units and several units from Russia's Black Sea naval fleet.

The exercises, which are being personally overseen by Gen. Nikolai Makarov, the chief of Russia's General Staff, are structured around a theoretical crisis situation that spirals out of control into open fighting, the ministry said.

Tensions remain high between Russia and Georgia, which lost authority over the regions of South Ossetia and Abkhazia during the war in August. Russia has been building military bases, storage facilities for supplies and roads in the two regions, which Moscow recognized as independent, and around 6,000 troops are based in each region.

Moscow has been openly hostile to Georgia's ambitions to join NATO and has signaled that it would not tolerate any other ex-Soviet republics from joining the alliance.

Still, Georgian President Mikhail Saakashvili has not backed down on his drive for NATO membership and his efforts to draw closer to the United States.

Last month, NATO wrapped up a month of its own training exercises in Georgia, though just a few hundreds troops participated. Despite the small size of the games, Russia was irked, calling them a provocation.

Deputy Defense Minister Col. Gen. Alexander Kolmakov was quoted by Russian media on Monday as saying that the Caucasus 2009 exercises were adjusted as a result of the NATO games and would be "quite major, as compared with those that were conducted in Soviet times."

NATO and Russia over the weekend agreed to resume military ties that had been frozen after the Georgian war.